The document discusses customer relationships and how to get, keep, and grow customers. It provides examples of different customer archetypes and how their roles, budgets, motivations, and influences impact getting their business. It also discusses paid and free demand creation activities, as well as calculating customer acquisition cost and lifetime value to understand the balancing act between acquiring and retaining customers. Physical products are compared to web/mobile products in terms of different customer relationship challenges and opportunities.
6. Customer Archetypes
Drive Get/Keep/Grow
Lab Manager: Brian
• What’s their role?
– How this person is evaluated / promoted /
compensated?
• Who are they?
– Buyer’s name
– Position / title / age / sex
• How do they buy?
– Discretionary budget (name of budget and
amount)
• What matters to them?
– What motivates them?
• Who influences them?
– What do they read/who do they listen to?
7. Paid Demand Creation Activities
“Paid” Media
Demand
Creation
• Public Relations
• Advertising
• Trade Shows
• Webinars
• Email marketing
• On-line SEM
• Biz Dev
8. Free Demand Creation Activities
“Earned” Media
Demand
Creation • Publications in journals
• Conference speeches/papers
• Educational seminars
• Public relations
• Blogging / Sharable content
• Social Media
• Communities
21. Our Example Marketing Funnel
Quick Marketing Calculation
50% amount of traffic that is organic versus paid
$1.50 cost per paid visitor (Google AdWords, etc.)
$ 0.75 Cost per visitor (both paid and unpaid)
3% visitors convert to raw leads
20% number of raw leads that turn into qualified leads
1 qualified lead
5 raw leads required
167 visitors required
$125 Cost of visitors (also = Cost per qualified lead)
Source: David Skok Matrix Partners
22. Our Example Marketing Funnel
Quick Marketing Calculation
50% amount of traffic that is organic versus paid
$1.50 cost per paid visitor (Google AdWords, etc.)
$ 0.75 Cost per visitor (both paid and unpaid)
3% visitors convert to raw leads
20% number of raw leads that turn into qualified leads
1 qualified lead
5 raw leads required
167 Visitors required
$125Cost per qualified lead
Source: David Skok Matrix Partners
23. Our Example Marketing Funnel
Cost per Qualified Lead $125
Leads to closed deal 10
Marketing Costs per closed deal $1,250
Source: David Skok Matrix Partners
24. We Can Compute CAC and LTV
Excludes people costs
Lead Gen costs per deal $ 1,250 (Cost per qualified lead x no of leads
required per closed deal)
Selling costs per deal $ 1,620 Excludes cost of sales management
Excludes people costs in marketing, and
Total CAC $ 2,870 sales management.
(CAC= Cost to Acquire a Customer)
Calculated by dividing average monthly
Total LTV $ 16,000 gross profit per customer (ARPU x Gross
Margin ) by the churn rate
This excludes people costs in marketing, and sales management costs
Source: David Skok Matrix Partners
25. Balancing CAC/LTV in a SaaS model
LTV >3x CAC
Months to
recover CAC <12 months
Required for Capital Efficiency
Source: David Skok Matrix Partners
26. What Investors are Looking For
A well balanced business model
Monetization
(LTV)
Cost to
Acquire a
Customer
(CAC)
Source: David Skok Matrix Partners
27. The Balancing Act
• Viral effects
• Inbound Marketing
• Free or Freemium
• Open Source
• Free Trials
• Touchless conversion
• Inside Sales
• Channels
• Strategic partnerships
Cost to Acquire a Customer Monetization
(CAC) (LifeTime Value LTV)
• Scalable Pricing
• Cross Sell/Upsell
• Product line expansion
• Lead Gen for 3rd
parties
Source: David Skok Matrix Partners
28. The Balancing Act
• Viral effects
• Inbound Marketing
• High Churn Rates
• Free or Freemium
• Open Source • Low customer
• Free Trials satisfaction
• Touchless conversion
• Inside Sales
• Channels
• Strategic partnerships
Cost to Acquire a Customer Monetization
(CAC) (LifeTime Value LTV)
• Field Sales • Scalable Pricing
• Cross Sell/Upsell
• Outbound • Product line expansion
Marketing • Lead Gen for 3rd parties
Source: David Skok Matrix Partners
30. How Churn affects LTV
• Average customer lifetime in months =
1 / Monthly Churn
Source: David Skok Matrix Partners
31. How Churn affects Lifetime
Months Lifetime vs Churn Rate
120
100
100
80
60 50
40
20
20
0 Monthly
Churn
1% 2% 5%
Source: David Skok Matrix Partners
32. How Churn affects LTV
Lifetime Value
Monthly
Churn
Source: David Skok Matrix Partners
33. Impact of lowering Churn
Cumulative Net Profit
Net Profit $7,000,000
$1,200,000
$6,000,000
$1,000,000 $5,000,000
$4,000,000
$800,000
$3,000,000
$600,000
$2,000,000
$400,000
$1,000,000
$200,000 $-
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 13
Month 15
Month 17
Month 19
Month 21
Month 23
Month 25
Month 27
Month 29
Month 31
Month 33
Month 35
$(1,000,000)
$-
$(2,000,000)
$(200,000)
$(3,000,000)
$(400,000)
$(4,000,000)
Churn 1.25% Churn 2.5%
Churn 1.25% Churn 2.5%
• Impact of lowering the churn rate is felt more heavily in the later years, as expected
• It has a significant impact on the long term profitability of the business
Source: David Skok Matrix Partners
34. Churn
• 1% to 2.5% churn per month is acceptable
• Higher than that, you are filling a leaky bucket
– Need to understand why you have low customer
satisfaction and address the problem
Source: David Skok Matrix Partners
38. Demand generation plan and budget
• Word of mouth generation
– 2 systems for “Demo day events”
– 2 systems for customer demos
– 4 x 30K each = $120,000
• World Ag Expo Booth
– 1 x 40x40 corner booth with demo
– Hold press event breakfast
– $ 15 K (booth, banners, hotels)
• Magazine campaign
– 3 ads in 2 magazines
– Goal – get 2 articles on us
– 2 x $ 10K + Ad agency = 30K
• Total $165 K
“You prove that it works and everything else is easy. Distribution is not that
complicated in farming.” – Wyatt Duncan, Integrated Crop Pest Control
49. • We ran a Facebook ad to test actual willingness2
to pay for this service
49
50. • To test willingness to pay we used three 2
identical ads with three different landing pages
50
51. • To test willingness to pay we used three 2
identical ads with three different landing pages
Ad Sign-ups Clicks Ad spend
Free 0 23 $25
$1/household 0 25 $25
$1/user 0 24 $25
• Unfortunately, test results only proved users did not trust our site
for payments
• Facebook traffic on this campaign was on our page for 4
seconds on average
• Roommate campaign had a 1:37 site time average
• Outstanding question: can we win trust in other ways and then
engage users to pay rent through us?
51
52. • Customer archetype: Sara
How she searches
Wants to be efficient (will use a broker if doing a
search on her own is too painful)
Asks friends for recommendations
What Matters to Sara
Wants to live in a fun place that is safe
Doesn’t want to overpay
Doesn’t have much time to hunt for a place
Live with someone she trusts (moving to DC)
Influences
Where friends go out/live
Work location
52
55. What We Found: High referral traffic
4 day progress report
Overall Signup progress
1258
31 filled 5-
136 min survey
10.8%
56. What we did: Targeted women, all couples Demand generation test
Hypothesis: Women-in-relationships are likelier to click
through, irrespective of distance status
Tested for $30 Facebook click through & conversion from FB
impressions
Ad-1 Ad-3
Ad-2 Ad-4
57. What we found: women click more
...................................but not clear who will pay!
Couples will pay subscription if they find more Subscription model test
1 sharing during free trial valuable
LDRs 1 Takeaway: “More
6 sharing” without
Paid convenience will have to
be free.
SLRs 4
Good if free
Women likelier to click through irrespective of Demand generation test
II
distance status
Click
LOCATION Impressions Through Men Women Women-in-rel
rates
87140
58. What we found: Clicks, no web app usage Demand generation test
Funnel: “Couples” campaign
$ 29.7 this week
304,286 0.01 c
impressions
122 uniques 0.35 c/new
85 new
24.6% conversion
30 sign-up 0.99 c
clicks
but one used web app
60. Year 1 Web funnel Year 5
100 000 hits Referenced to our web site 300 000 hits
50% 70%
Fill out savings calculator
20% 30%
Send request to sales
30% 30%
Reconnection with viable
customer
80% 80%
Visit to site
10% 20%
Close sale
Total Total
Revenue
1.44 million Revenue
18.14 million
69. AB Testing Results
0% conversion 42% conversion 75% conversion 32% conversion
• Original Peaya website has 66% conversion rate
• Conversion defined as people clicking the download button on the landing page
• Experiment still underway; too few data points for drawing conclusions
70. Google &Facebook campaigns
• Keywords: free endnote, reference manager, pdf
manager, Itunes for digital content, I tunes, manage
pdf, organize paper, paper manager, citation
manager, paper citation, cite pdfs
• 24 impressions, 2 clicks on googleadwords
• Clicks on free endnote and organize paper
• No Facebook response
• 1 Post on ResearchGate drew 7 visitors
71. We’re “a little” viral
12% of sign-ups from referrals
14 of 117 new registrations came
from referrals by 3 people from Jan
1 to Feb 1.
Referral bonus promoted in tutorial
72. Collaboration doesn’t “pop”…. yet
“Rate & Discuss” is least
interesting tutorial screen so far
However:
1) we can test different messages
(ie “collaborate”)
2) experiment is slightly biased in
ordering, we need further testing
77. ChannelIncentives
VP
All Institutions
Out-patient care/ Per Service High Value
home setting Revenue Model Therapies
Hospitals Private Dosing flexibility
Hospitals, specialty
clinics Efficient patient
Pain Clinics management
In-patient care/ Per Diem
hospitalization Pharmacoeconomics
Revenue Model
HMO, ACO, Non-
profit, University
Hospitals
78. Demand Creation
Patients/Advocacy
Groups
Conferences / Trade magazines / PR
Societies conferences
$20k/event * 6 events $20k/event * 4 events
Research Journal
One on one Meetings
$150k/year travel
Adoption Publications
(Free)
Budget ~ $300 k/year