Will you marry me? Why engagement is the key to maximizing LTV (Lifetime Value). Presented at the FirstMark marketing summit on October 23, 2013.

1. Will you marry me?
Why engagement is the key to maximizing LTV (Lifetime Value)
Presented by: Brent Chudoba, SurveyMonkey
FirstMark Online Marketing Summit
October 23, 2013

2. Hi,
I’m Brent
• VP, GM of SurveyMonkey
Audience
• @SurveyMonkey since Apr. ’09
• Schoology BoD member
@bchudoba
brentchudoba.com
in/brentchudoba
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3. • If there was one metric I could increase, at every
company where I am an equity holder, it would be
engagement
• Engaged users:
- Convert at higher rates
- Stick around longer
• Because they are getting value
• Because they develop higher switching costs
- Tell you about their needs
- Tell others about your product
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4. Conversion & engagement optimization
• Pure conversion optimization strategies and tactics are incredibly
useful, and well defined
- Quick to test and simpler to measure
- There is often a ceiling on tactical conversion gains
• You don’t typically use conversion to drive engagement
• But you always use engagement to:
- Increase conversion
- Increase ARPU (average revenue per user)
- Increase retention
• And I want to show you why introducing engagement metrics can
drive outsized gains
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5. Presentation goal
• Provide you with some useful examples and
ways to measure and factor engagement into
your product, marketing and business intelligence
roadmap
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6. Engagement philosophy
• If customers get value from your product they will pay
you, stick around and grow
- If they don’t, they’ll eventually leave
• Engagement is a tool to get users across a set of
customer success milestones that translate to value
- If a SurveyMonkey customer sends out surveys every year
and gets enough responses to help them make better
decisions, they are getting value. How do I help get them
to that point?
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7. Conversion optimization example
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8. 2008
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9. 2013
Tactical Improvements
• “Most Popular” badge
• Above the fold, simple
feature call outs
• Highlight key package
differences
• Feature differentiation by
package
• Tiered package naming
• Simple CTAs
• Comparable monthly
pricing shown
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10. Why does engagement matter?
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11. An engaged user is more likely to convert to a
paid user, increase their spend over time, and
less likely to cancel their usage of your product
than an inactive, unengaged user.
• Do you agree or disagree w/ the statement
above?
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12. So, engagement matters
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13. But, how can we quantify
how much engagement
matters?
And, how can we impact it?
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14. Quantifying engagement benefits
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15. • An example shows highly engaged users convert at 4x the rate of less engaged users
- Essentially all highly engaged users convert
• Heat map of conversion rates by engagement level:
#
of
Responses
Collected
More
Less
Less
More
#
of
Surveys
Deployed
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16. • Introducing more features and use cases for products creates
additional value
• For SurveyMonkey customers who sign up for a paid account, every
additional paid feature they use results in a drop in their churn rate
1 Month Churn Rate
High
Zero
Zero
Number of Paid Features Used in First Month
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Many

17. How do you drive engagement?
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18. Driving engagement
• How do you integrate engagement campaigns
into your metrics and roadmap?
- Identify: figure out what defines an “engaged” user
- Optimize: increase the % of users that “engage”
- Activate: cherry pick top prospects and help them
succeed
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19. Identify
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20. What are your engagement milestones?
• Start at the end
- When has a customer gotten value from your
product?
• Now figure out how they got there
- What are the critical actions that customers go
through to reach a full engagement milestone?
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21. Finding your end point
• When does your customer…
- Login, smile and say, “Wow, this is
awesome. This just saved me a
ton of time. This product was worth
every penny, and I might even +1
or Like this company and tell a few
colleagues how great this is. Yes
SMB SaaS product, yes I will
marry you!”
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22. Engagement variants
• Singular Objective Success Point
- 1 main use case, or 1 main user type
- “Success” looks similar for nearly all users
- Ex: Nearly all SurveyMonkey users are trying to
create a survey and get responses
• Variable Objective Success Points
- Multiple user types, varied “success” definitions
- Ex: Schoology (students, teachers, administrators,
parents) all have different “success” definitions
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23. Example: SurveyMonkey engagement funnel
• What does it take for a user to engage?
• We identified that sending out a survey and
getting responses was when a user derived value
from our product
- We decided that more than just a few test responses
was important
• And then we worked through the experience to
figure out how they got there
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24. • Sign up for an account
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25. • Create a survey
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26. • Add a question
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27. • Begin collecting responses
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28. • Gather responses
Whoa! Awesome. I
had no idea over
80% of my team had
smart phones
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29. Optimize
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30. Establish baselines, measure results
Reach Engagement
Stage 1
% of New Users
• A metrics driven product
agenda starts w/ a
baseline understanding of
the status quo
• Then tests w/ various
experiments to see where
it can drive measurable
impact
• Lather, rinse, repeat
Something
worked here
Reach Engagement
Stage 2
Reach Engagement
Stage 3
Reach Engagement
Stage 4
Conversion Rate
Time
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Conversion Rate
Time

31. What works?
• Long term engagement wins are rarely easy
• Engagement needs to be a success metric that is
factored in to product and marketing goals
• Features designed with engagement in mind can
increase engagement
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32. Engaging onboarding experiences
• Are designed to get users through the engagement process
• Checklists, gaming elements like profile strength are useful for both users
and your business intelligence
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33. Engagement shortcuts don’t exist
• There aren’t nearly as many tactics to better
engage users as there are to convert them
• You need to earn your engagement, shortcuts
lead to red herrings that don’t materialize in
conversion
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34. Activate
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35. Are all users created equal?
• We all know, the answer is no
• There are big fish swimming in your pond, and
with the right engagement strategy, they will be
massive customers
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36. Do you optimize for big fish? Or all fish?
• Your best customers might be worth 10x your
average customer
• Are you activating your 10x’rs to make sure they
stick around?
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37. How much are your best customers worth?
• Certain models necessitate cherry picking top
customers to ensure engagement
• If 10% of your customers have the potential to
drive 10x+ annual revenue value, you can
replicate (or exceed) subscription economics
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38. • SurveyMonkey Audience customers transact differently than monthly
subscription customers
• They buy projects, so some of them don’t come back
• But those who do, are incredibly valuable
Cumulative Revenue
Avg. Year 1 Revenue from Repeat Customers
Avg. Year 1 Revenue from ALL Customers
1
2
3
4
5
6
7
8
Month
* Actual numbers are confidential, this chart is intended to show the relative impact
* Repeat customers includes any customer that purchased in month 1 and any successive month
• `
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9
10
11
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39. How do you activate your best customers?
• The million, or maybe billion $ question
• Engagement for 10xrs has even bigger
implications
- Special programs to ensure they move through the
engagement funnel are critical
- Resourcing to ensure customers w/ $20k+ potential
are successful will often pay huge dividends
- And the knowledge of what success means is critical
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40. Thank
you!
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41. Acknowledgements
• The SurveyMonkey Business Intelligence team provided all the important
data for this report
• They provide all the data and insights that help SurveyMonkey make great
decisions, and they are abnormally cool people, which means we get to have
quite a bit of fun while we are at it
• Thank you BI, you rock
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