The Art & Science of Growth Hacking

The Art & Science of Growth Hacking
BUILDING A SALES & MARKETING MACHINE Upsell/ Cross Sell CAC/LTV Virality Engagement Retention Freemium Conversion Rates BY DAVID SKOK Free Trials
THE ART & SCIENCE OF GROWTH HACKING Upsell/ Cross Sell CAC/LTV Virality Engagement Retention Freemium Conversion Rates BY DAVID SKOK Free Trials
GROWTH HACKING Accelerate Growth Through Work on Funnel A PERSONAL DEFINITION INCREASE FLOW & CONVERSION
THIS USED TO BE MARKETING’S JOB WHAT’S CHANGED?
TODAY’S WORLD • Freely available information • Free Trials • On-line reviews • Social Media commentary THE CUSTOMER IS DOING THEIR RESEARCH BEFORE THEY COME AND TALK TO YOU
YOUR ON-LINE PRESENCE IS KEY
THE PRODUCT IS YOUR SALESPERSON
THERE’S A RICH FLOOD OF NEW DATA
METRICS
REQUIRES A NEW COMBINATION OF SKILLS BOTH MARKETING AND TECHNICAL
Data Science THE GROWTH HACKER Creative Marketing Inbound Marketing Customer Experience & Product Design Funnel Optimization Instrumentation & Metrics
THE BASICSOF FUNNEL DESIGN
Suspects Closed Deals Loyal Customers who are Advocates
Suspects Closed Deals Loyal Customers who are Advocates Virality
IN A PERFECT WORLD… 1 Step
IN A PERFECT WORLD… MyProduct.com HOW IT WORKS DESCRIPTION Our product allows you … BUY NOW! Only $9,999.99
BUYER THE QUESTIONS & CONCERNS • Will this solve my specific problem? • Is this the best product in the market? • Can I trust this vendor? • How hard is this to implement & use? • Is it a safe choice? (Who else is using it?) • Will I get a return on my investment? • Is it scalable, secure? • Etc.
DESIGNING YOUR FUNNEL
WHAT IS A FUNNEL? ACTION MOVEMENT ACTION MOVEMENT ACTION MOVEMENT
HOW DO WE DESIGN THE ACTIONS?
BUYER THE
THE BUYERS JOURNEY CONSIDERATION CLOSED DEAL AWARENESS PURCHASE
TRIGGERS • Moving house • Movers, phones, cable TV, furniture, insurance, etc. • Starting a new software project • PaaS (Platform as a Service), Dev Tools, etc. • Need to hire a lot of new employees • Applicant Tracking System • Just lost my data in hard drive crash • Backup software/service • Read about a new scary computer virus • Anti-virus software
Suspects ToFu Top of the Funnel MoFu Middle of the Funnel Closed Deals Sales Bottom of the Funnel Loyal Customers who are Advocates Customer Sucess Retention Funnel Retain Expand Upsell / Cross sell Nurture & Qualify Inbound & Outbound Marketing Typical B2B Funnel AWARENESS CONSIDERATION PURCHASE
Suspects ToFu Top of the Funnel Raw Lead Inbound & Outbound Marketing ToFu – Top of the Funnel AWARENESS Email address or other contact info
Suspects ToFu Top of the Funnel Inbound & Outbound Marketing ToFu – Top of the Funnel AWARENESS Latent Need? • Buyer not aware they have a need • Or not aware there is a solution Apparent Need? • Buyer is aware they have a need, and they are looking for a solution
Suspects ToFu Top of the Funnel Inbound & Outbound Marketing ToFu – Top of the Funnel AWARENESS Latent Need • Market needs Education Apparent Need • Understand how they are looking • Ensure you get found during their research
Suspects ToFu Top of the Funnel Inbound & Outbound Marketing ToFu – Top of the Funnel AWARENESS Inbound Marketing • Content Marketing • Blogging, YouTube, etc. • Social Media for distribution Outbound Marketing • Cold calling – (Sales Development Reps) • Outbound email • Working with Partners
MoFu Middle of the Funnel Nurture & Qualify MoFu – Middle of the Funnel CONSIDERATION Raw Lead MQL - Marketing Qualified Lead
MoFu – Nurture and Qualify Nurture Qualify Lead Nurturing Database Raw Lead MQL
MoFu – Segment, Nurture & Qualify Personalized Nurturing QualifyRaw Lead MQL Segmented Database
What do we know about them? Buyer Attributes What do their actions tell us? Behaviors DATA: THE CROWN JEWELS
MARKETING INTERACTIONS
ENGAGEMENT / PRODUCT USAGE SCREEN SHOT FROM TOTANGO
EXAMPLES OF USAGE: • IN APP MESSAGING – “We noticed that you haven’t tried X feature. It has the following benefits. Here is a link to a Video showing you how to use it.” • EMAIL – Send to all RAW LEADS that are in the FINANCE vertical, we have a Webinar showing how Customer X uses our product to do fraud detection. • SALESFORCE.COM QUEUES – Add all Trial Users whose Engagement Score is below 50 to the Customer Success Teams call queue
METRICS "IF YOU CAN NOT MEASURE IT, YOU CAN NOT IMPROVE IT." - LORD KELVIN
METRICS FLOW / QUANTITY CONVERSION RATE
WHAT TO MEASURE FOR EACH STEP / ACTION: NO OF ACTIONS % CONVERSION RATE TIME TIME
VISITORS CAMPAIGNS TO DRIVE TRAFFIC TRIALS CLOSED DEALS CONVERSION % CONVERSION % THE KEY METRICS OVERALL CONVERSION %
Visitors Trial 5% 10% $5,000 Customer NOT ALL LEAD SOURCES ARE EQUAL Google Ad Word Funnel FaceBook Ad Funnel Visitors Trial 2% 20% $8,000 Customer
ROI by LEAD SOURCE OVERALL CONVERSION % (BY LEAD SOURCE) Cost per lead Lifetime value of the Customer
THE MAGIC OF FUNNEL MATH
Raw Lead Marketing Qualified Lead Sales Accepted Lead Opportunity Closed Deal FUNNEL MATH 20% 90% 25% 20% CONVERSION RATES
Raw Lead Marketing Qualified Lead Sales Accepted Lead Opportunity Closed Deal REVERSE FUNNEL MATH 20% 80% 25% 20% CONVERSION RATES Closed Deal1 Opportunity5 Sales Accepted Lead 20 Marketing Qualified Lead 25 Raw Lead125
SALES CAPACITY – A KEY PROBLEM • An extremely common scenario: – Portfolio companies miss their bookings by not having enough sales capacity 0 1 2 3 4 5 6 7 8 9 10 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Bookings Actual vs Budget Actual Budget Shortfall
SOLUTION • Track Sales Capacity as a key metric • Hire ahead of the budget and sales plan • Build a recruiting machine • Build a superb On-Boarding training program
REFINING THE SOLUTION • Become experts at Sales Coaching – Measure each step of the sale process • Outbound calling • Leaving messages • Doing Demos • Closing – Take the best at each stage and use to coach the worst • Quickly remove the consistent non-performers
BUT EVEN IF YOU ARE MICROSOFT, CISCO, ORACLE, OR GOOGLE YOUR FUNNEL WILL HAVE BLOCKAGE POINTS Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects
IN DIAGNOSING MANY FUNNEL BLOCKAGE POINTS, I HAVE FOUND THAT THERE IS A CLEAR PATTERN…
NOT MOTIVATED TO DO THAT THEY ARE CUSTOMERS WILL DO SOMETHING YOU ARE HOPING YOUR
IN OTHER WORDS… YOU DESIGNED YOUR FUNNEL THE WAY YOU HOPED IT WOULD WORK… BUT YOU MAY NOT HAVE THOUGHT ENOUGH ABOUT THE CUSTOMER’S POINT OF VIEW
JBOSS EXAMPLE CUT THE DOWNLOAD RATE BY MORE THAN 10X PUT A REGISTRATION FORM ON THEIR WEB SITE BEFORE A FREE DOWNLOAD IMPACT
FRICTION GET INSIDE YOUR CUSTOMER’S HEAD CONCERNS
UNDERSTAND WHAT MOTIVATES THEM MOTIVATIONS FRICTION CONCERNS
JBOSS EXAMPLE • Making $27,000 a month selling documentation • Solution: • Give away documentation to get their email address
EXAMPLE: DRIVING TRAFFIC TO YOUR WEB SITE GETTING FOUND Not going to find your site unless: - On top page of Google search results - Recommended by a trusted source - Referred to in social media or blogosphere friction & concerns
LESSONS FROM WEBSITE GRADER • Free tools drive viral spread • Low customer work required • High value delivered • Score leverages competitive urge, and acts as a trigger • Builds trust through clear demonstration of expertise
GOOD LINKAGE TO NEXT STEP
using engineering for marketing GROWTH HACKING
USING DATA TO DRIVE WEB TRAFFIC SYSOMOS: SOCIAL MEDIA MONITORING LEVERAGED THEIR DATABASE TO CREATE BLOG POSTS WITH DATA ON TOPICS OF CURRENT INTEREST: • IRAN ELECTION RIOTS • TWITTER’S GROWTH • FACEBOOK USAGE
LED TO: SYSOMOS ARTICLES IN ECONOMIST, NY TIMES WEB TRAFFIC TO READ THE FULL REPORT LEADS – IMPRESSED BY THE CAPABILITIES OF THE SOFTWARE
FREE TRIALS THE PRODUCT IS YOUR SALES PERSON
WHAT IS YOUR TIME TO WOW! ? Thanks to Gail Goodman of Constant Contact WOW!
TIME TO WOW! • How many steps? • How much time does it take? • How much FRICTION is involved
REMOVE STEPS & REMOVE FRICTION e.g. Provide Sample Data instead of requiring them to load their own
WOW! ANALYZE TRIAL STEPS AS THOUGH THEY WERE FUNNEL STEPS Create a full profile Import Contacts Do a search for Prospects See search results Imagine a Sales Rep signing up for the old LinkedIn
WOW! LOOK FOR BLOCKAGE POINTS Create a full profile Import Contacts Do custom search for Prospects See search results Imagine a Sales Rep signing up for the old LinkedIn HIGH FALL OFF RATES HERE
For an Outlook/Exchange User WOW!Create a full profile Import Contacts Do custom search for Prospects See search results Download an App Install the App Run the App
APPLY BLOCKAGE POINT THINKING WOW! FRICTION MOTIVATION CONCERNS Replace the downloaded App with request for email credentials and get contacts from Exchange. Create a full profile Import Contacts Do a search for Prospects See search results
• Concern: – I have tons of very private and confidential emails. I don’t want anyone to read those. You want me to give you the password to login to my email?!!!
APPLY BLOCKAGE POINT THINKING WOW! FRICTION MOTIVATION CONCERNS Replace the downloaded App by connecting to Contacts on iOS/Android Create a full profile Import Contacts Do a search for Prospects See search results
RE-THINK THE PROCESS Source: Josh Porter – Designing for Social Traction CONVENTIONAL APPROACH SIGN UP FOR TRIAL CONVERT TO CUSTOMER WOW! WOW! FIRST, REGISTER LATER WOW! SIGN UP CONVERT TO CUSTOMER
MAY VARY FOR DIFFERENT CUSTOMER TYPES E.g. LinkedIn • Different personae: – Recruiter – Sales person – Individual looking to find a job MAKE SURE THERE IS A CLEAR PATH FOR EACH ONE WOW!
A/B TESTING WEB SITE, LANDING PAGES, PRODUCT DESIGN
ADD VIRALITY Customer first sees your app Tries it Creates/sees information that they want to share Creates an invitation, looks up addresses, and sends Friend receives information + invite to join Friend decides to take a look
MEASURE FLOW & CONVERSION Customer first sees your app Tries it Creates/sees information that they want to share Creates an invitation, looks up addresses, and sends Friend receives information + invite to join Friend decides to take a look CONVERSION %
APPLY BLOCKAGE POINT ANALYSIS Customer first sees your app Tries it Creates/sees information that they want to share Creates an invitation, looks up addresses, and sends Friend receives information + invite to join Friend decides to take a look
FOR MORE ON VIRALITY The Science behind Viral Marketing http://www.forentrepreneurs.com/the-science-behind-viral-marketing/
WHY CHURN IS SO IMPORTANT SaaS & RECURRING REVENUE
Revenue Lost with 2.5% monthly Churn Renewals Lost due to Churn YEAR 3 $3m $7m Becomes harder & harder to replace this with new bookings Renewals Lost due to Churn YEAR 6 $30m $70m
CHI SCORE CUSTOMER HAPPINESS INDEX
PROACTIVE STEPS TO REDUCE CHURN • Identify high risk customers (CHI score) – Messaging (In-App, email) to try to correct – Calls from Customer Success team
PRODUCT STICKINESS CONTRASTING EXAMPLES • SEO – High value in first 90 days – But not sticky • Marketing Automation – Valuable Data that grows over time – Part of important daily workflows
NEGATIVE CHURN INCREASED REVENUE FROM RETAINED CUSTOMERS LOST REVENUE FROM CHURNED CUSTOMERS >
IMPACT OF NEGATIVE CHURN MRR (Monthly Recurring Revenue) $- $1,000.0 $2,000.0 $3,000.0 $4,000.0 $5,000.0 $6,000.0 $7,000.0 $8,000.0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 5% Churn 0% Negative 5% Churn
REQUIRES PRICING THOUGHT At least one axis where pricing increases: Enterprise Edition Pro Edition Basic Users Features Depth of Usage Examples: - Mailing list size - Database size - Amount of storage used
BUSINESS VALUE
MOST STARTUPS MARKET AROUND FEATURES
• Ensure the product delivers this value • Ideally in a measurable way • Focus Customer Success team on getting this result • Measure the increase/change from a baseline • Provide feedback on ROI by quarterly email WHAT IS YOUR BUSINESS VALUE?
BUYER THE THE KEYS TO SUCCESS GET INSIDE YOUR BUYER’S HEAD
BUYER PERSONA What characteristic most clearly identifies this Persona? • Job role? • Looking for a particular type of product? When purchasing this kind of product: • What pain are they trying to solve? • What are their desired Business Outcomes? • What are their key Decision Criteria? • Is this buyer persona going to be receptive to our product? • If not, what would they be receptive to? • Feature changes • Competitive products • What are their Perceived Barriers to making a purchase?
BUYER PERSONA • Role / job description? • What is the primary goal of this person’s job? • What is the greatest pain in this person’s work life? • What is their role in the decision making process? • Who do they report to? • How does their boss measure their success? • Who are their key influencers? • What publications do they read, & what events do they attend? • What messaging will appeal to them? Secondary Questions – useful for Messaging & Content Marketing
For More information • Visit my blog at www.forEntrepreneurs.com

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