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Lovellvgf10 funnel


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A shorter version of Feeding the Funnel. I gave this presentation at the Virtual Goods Forum

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Lovellvgf10 funnel

  1. 1. Feeding the funnel:finding the levers to turn users into profits<br />Nicholas Lovell, GAMESbrief<br />
  2. 2. About me<br />Former banker (I don’t do that anymore)<br />Former web entrepreneur<br />Founder of GAMESbrief (<br />Author of How to Publish a Game<br />
  3. 3. What am I talking about?<br />
  4. 4. The funnel<br />Users<br />Profits<br />
  5. 5. The funnel matters because it is your entire business<br />To emphasise that, we need Equation I<br />CPA < LTV = good business<br />CPA > LTV = trouble<br />Where:<br />CPA is cost to acquire a user<br />LTV is the Life Time Value of a user<br />Why the funnel matters<br />
  6. 6. How most people start<br />1% convert = £1,000.00<br />1% convert = £10.00<br />Say each costs £0.10<br />Only if the average user stays for 100 months!<br />I’ll get some visitors<br />Some who visit will register<br />Some who register will subscribe<br />Subscribers will spend an average of £10 per month<br />I’ll put my Maserati on order<br />
  7. 7. Feeding the funnel<br />Marketing<br />PR<br />SEO<br />SEM/PPC<br />Unique users<br />Harness users to create virality:<br /><ul><li>Referrals
  8. 8. Facebook Connect
  9. 9. Importing contacts
  10. 10. Twitter</li></ul>Cross-promote from other titles<br />
  11. 11. Converting it<br />Unique users<br />Registered users<br />Active users<br />Paying users<br />Revenues<br />For your business:<br />Draw the funnel<br />Reduce to as few steps as possible<br />Know the conversion rate for every step<br />Tweak, iterate, test until you know exactly how your funnel converts <br />
  12. 12. Monetizing it<br />Advertising<br />Virtual Goods<br />Revenues<br />Subscriptions<br />Downloads<br />There are many sources of revenue<br />Virtual goods / microtransactions are flavour du jour (and my favourite)<br />In your own business, focus on ARPPU<br />
  13. 13. Find the levers<br />Users are not the only metric<br />The others depend on your business, but might include:<br />Page views<br />Video views<br />Game downloads<br />Purchase of a virtual item<br />A metric that you can’t influence is no good<br />Focus on LEVERS<br />
  14. 14. Digression: what do users buy<br />
  15. 15. If you can, harness virality<br />A viral business can be an insanely profitable business<br />CPA is close to zero, so even if LTV is low, your business is great <br />Time for Equation II:<br />Viral coefficient = A% x B x C%<br />Where<br />A% = Percentage of your users who invite a friend<br />B = Number of friends they invite<br />C% = Percentage of friends who accept the invitation<br />If viral coefficient > 1.3, time to order the Maserati<br />
  16. 16. Levers are your secret weapon<br />Find the metrics that have the biggest impact on the bottom line<br />Try to reduce the metrics to one!<br />Three is more usual<br />Make sure they are LEVERS<br />Laser-like focus on pulling and improving these LEVERS<br />The result will be a better business and a happier team<br />
  17. 17. Thank younicholas@gamesbrief.comFollow my blogwww.gamesbrief.comBuy my book<br />