Chi pma metrics presentation


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Chi pma metrics presentation

  1. 1. Customer Metrics<br />What works?<br />
  2. 2. Creating a Data DrivenProduct Organization<br />Establish a dashboard<br />Build a funnel<br />Manage retention<br />
  3. 3. Establish a dashboard<br />
  4. 4. Key Goals<br />Profitability<br />Monthly Recurring Revenue<br />Key Goals<br />Cash<br />Months to recover Cost of Customer Acquisition<br />Growth<br />
  5. 5. Profitability<br />Customer Acquisition Cost (CAC)<br />Micro-Economics<br />(per customer profitability)<br />Lifetime Value (LTV)<br />Monthly Recurring Revenue<br />Revenue<br />Services Revenue<br />Expenses<br />Overall Profitability<br />(Accounting)<br />Profitability<br />COGS<br />Revenue per Employee<br />Profitability per Employee<br />Expenses per Employee<br />
  6. 6. Key Metrics<br />Customer Acquisition Cost (CAC)<br />Lifetime Value (LTV)<br />< 3 X<br />Months to recover CAC<br />< 12 Months<br />
  7. 7. Customer Profitability<br />Average Monthly Revenue Per Customer<br />LTV<br />Average Customer Lifetime<br />% Churn Rate<br />Cost to Serve<br />Customer Profitability<br />Number of Deals closed<br />Funnel Metrics<br />CAC<br />Marketing Program Costs<br />Total Cost of Sales and Marketing<br />Level of Touch Required<br />Personnel Costs<br />
  8. 8. Build a funnel<br />
  9. 9. Dave McClure’s Funnel<br />
  10. 10.
  11. 11. David Cancel’s FunnelNote: this is too pretty for him <br />Website Visitors – 100%<br />Sign up for trial – 10%<br />Log in to account – 8%<br />Active Users – 4%<br />Paying Users - 2%<br />Long term users<br />>1 year – 1%<br />
  12. 12. Drill Down on the Funnel<br />Look at the metrics by customer segments (cohorts)<br />Look at the metrics by campaign source<br />Look at the ROI<br />Number of Raw Leads<br />Conversion to paying Customers<br />ROI per Marketing Program<br />Marketing Program Costs<br />Cost per Lead<br />
  13. 13. Conversion<br />“2% is the average conversion rate in the United States of America whether you're selling elephants or iPods.”<br />AvinashKaushik - Analytics Evangelist, Google<br />In general, software companies expect 1%-3% of customers using the free version of their software to upgrade.<br />TrialPay’s 2011 REPORT: BEST PRACTICES IN ACQUIRING SOFTWARE CUSTOMERS<br />
  14. 14. What is the #1 thing you can do to optimize the funnel?<br />Manage retention<br />
  15. 15. Retention<br />Increasing retention (LTV) directly decreases CAC<br />Moving from 1% to 2% retention doubles revenue and halves CAC<br />Renewals<br />Product Issues<br />Product Usage Map<br />Customer Satisfaction<br />Net Promoter Score<br />Churn Rate<br />Cohort Analysis<br />Customer Surveys<br />
  16. 16. Customer Satisfaction<br />Best indicator of customer satisfaction is Net Promoter Score<br />Ask 1 question – "How likely is it that you would recommend our company to a friend or colleague?" on a scale from 0-10<br />3 groups<br />Promoters (9 or 10)<br />Passives (7 or 8)<br />Detractors (0 – 6)<br />NPS = % Promoters - % of Detractors<br />
  17. 17. Cohort Analysis<br />Churn stabilizes in month 4<br />Improvement in first month churn<br />
  18. 18. Managing Cohorts<br />Determine the actions that repeat customers perform<br />Create interventions to drive customers to perform the actions<br />Create a flow (funnel) to see how the actions work together to change churn<br />Measure the results<br />Experiment until you get the results you want<br />
  19. 19. Cohort Funnel<br />Flow steps<br />Interventions<br />Sign in email<br />Sign In<br />Send user to search page after login<br />Search for wines<br />Review reminder banner ad<br />Review wines<br />Share pop up<br />Share your wine list<br />
  20. 20. Cohort Flows <br />
  21. 21. What tools can you use to do this?<br />If you are Daddy Warbucks:<br />Coremetrix<br />Omniture<br />If you are a cheapskate like me:<br />Google Analytics<br />Kissmetrics<br />Performable<br />MixPanel<br />
  22. 22. Issues With Analytics Tools<br />You need to know what you are doing before you do it<br />You need technical ability to set them up<br />Setting up the funnels is not intuitive and takes a lot of time<br />Only the big guys have specific retention functionality<br />
  23. 23. Be Sticky!<br /><br />
  24. 24. Resources and Props<br />I stole heavily from:<br />For Entrepreneurs (much more info on metrics)<br />David Cancel<br />Other shout outs<br />Dave McClure<br />Brant Cooper<br />Help us out and take the survey<br />