Presentation given at Groundworks Labs on how to grow your company by focusing on customer lifetime value (LTV) and monetization.

1. Monetization and Lifetime Value
HOW LIFETIME VALUE DETERMINES YOUR
SUCCESS AND HOW TO IMPACT IT

2. Presentation Overview
Relevant background
Why Lifetime Value
Importance beyond social media
Virality
Retention
Monetization
LTV varies among customers

3. Relevant Background
FROM START-UP TO BIGCO

4. Been there, done that
Co-founded Merscom CCO, led all marketing/sales/distribution
• Grew to top-5 casual game company
• Initiated and negotiated sale to Playdom, which was then rolled into $570 million Disney
acquisition
GM of Playdom’s International Publishing team
• Responsible for Europe, Latin America, Russia and India
• Grew it from scratch to 25 percent of Playdom’s revenue
CEO of FiveOneNine Games
• Joint venture of EW Scripps and Capitol Broadcasting
• Launched Facebook and mobile games
Currently consulting for The Jockey Club and Curious Sense, Chairman of
Globalization Committee at NC Central’s School of Business

5. Why Lifetime Value
THE THREE MOST IMPORTANT LETTERS FOR
YOUR BUSINESS: LTV

6. Function of three performance metrics
Monetization
Virality
Retention

7. Interdepence

8. Relationship between LTV and CPA
LTV > CPA
• Success
LTV < CPA
• Failure

9. Think of LTV starting day 1
Design and Beta and Post launch
develop other testing to focus on
Green-light
focused on to optimize improving
LTV LTV LTV

10. Importance beyond social media
CRUCIAL TO ANY BUSINESS

11. Online offerings
 Netflix
 Ebates
 Farmville

12. B2B
Square
Rackspace
Bronto

13. SaaS
 Salesforce
 HootSuite
 Basecamp

14. Retail
Restaurants
Department
stores
Car dealers

15. Virality
WORD OF MOUTH’S EXPONENTIAL EFFECT

16. Definition of virality
 K-score
 K=i*conv% (conversion percentage), where “i” is the
number of invites sent out by each new customer and
“conv%” is the percentage of invites that convert into
costumers

17. An advanced look

18. Importance of virality
Lowers cost of
customer
acquisition
Exponential
growth

19. Improving Virality
K=i*conv%
Increasing I
• Generate virality quickly
• Cater to Connectors
Increasing conv%
• Quality of communication
• Provide value for virality

20. Retention
CRUCIAL AND HARD TO FIX

21. Definition of retention
Customer
lifetime
N-day retention
Churn rate

22. Importance of retention
If they do not come
back, monetization
improvements are
virtually useless

23. Improving retention
 Product quality
 Get in their heads
 Make it social
 Make it global
 Use email and
advertising for re-
engagement

24. Monetization
SHOW ME THE MONEY

25. Definition of monetization
ARPDAU
Percentage of
ARPU (Average (Average
customers who
revenue per user) revenuer per
monetize
daily active user)
Average number
Average of monetization
transaction events per
customer

26. Importance of monetization

27. Improving monetization
Product
quality
Promotions
Value
and sales
Shopping More
experience selection
Balancing

28. LTV varies among customers
THERE IS NO SINGLE LTV

29. Cohorts
Time of year
Stage of product lifecycle
Holidays

30. Segments
Age
Sex
Income
Interests

31. Sources
Incentived Targeted
Television
ads search ads
Cross
Virality Press
promotion

32. Thank you
LLOYD@VERUSENTERTAINMENTGROUP.COM
WWW.LLOYDMELNICK.COM
@LLOYDMELNICK