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Marketing and The Sales PipelineMarketing and The Sales Pipeline
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Total Available Market, Served Available Market, Target Market
TotalAvailableMarket Served
TAM = how big is the universe
AvailableMarket
Target MarketSAM = how many can I reach with my sales channel Markety y
k (f )Target Market (for a startup) = who will be the most likely buyers
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SegmentationShow Me the Money
TotalAvailableMarket Served
• Geographic• Demographic
AvailableMarket
Target Market
g p• Psychographic variables• Behavioral variables
Ch l Market• Channel• etc…
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Customers, Marketing and the Sales FunnelCustomers, Marketing and the Sales Funnel• Positioning matters
DemandCreation
Acquisition
TotalAvailableMarket Served
AvailableMarket
PayingCustomers
$
Target Market
Market
$
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Positioning Happens BeforeD d C iDemand Creation
DemandC tiCreation
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Demand Creation Feeds the Sales FunnelDemand Creation Feeds the Sales FunnelDemandCreation
Paying
Acquisition
PayingCustomers
$
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Demand CreationE l E i S fExample – Enterprise Software
Demand
• Print Advertising• Direct Mail
Creation
• Viral marketing• E‐mail marketingg• Blogs• Communities• SEM/SEO
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Demand CreationE l W b Vi l W ldExample– Web Virtual World
S h i k i (S )Demand
• Search Engine Marketing (SEM)• Search Engine Optimization (SEO)
Creation
(SEO)• Viral marketing• E mail marketing• E‐mail marketing• Affiliate Marketing• Bannering• Bannering• Communities
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Demand Creation on the Web is DifferentDemand Creation on the Web is Different
• Search engine marketing (SEM) i.e. keyword advertising, paid search, etc.– your ad in a search engine. Paid for on a per‐click‐basis (PPC ‐ pay per click)
• Search engine optimization (SEO)– free traffic by optimizing your website for readability by the search enginesy p g y y y g
• Viral marketing– Spreads your message by your users/customer. i.e. Hotmail email tag line
• Affiliate management• Affiliate management– Partners that promote your product or service on their web own page. They earn money by selling your product.
• Bannering i e skyscrapers superbanners content ads flash layers etc• Bannering i.e. skyscrapers, superbanners, content ads, flash layers, etc.
– you buy media space on other websites on a PPC (pay per click) or CPM (cost per million.) Your banners displayed in predefined spaces.
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Demand Creation on the Web
You Pay For These
(SEM)(SEM)
These are Free(SEO)(S O)
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Customer Acquisition Cost
DemandCreation
To get one customer here
How much do you have to spend here
Paying
Acquisition
PayingCustomers
$
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The Sales FunnelThe Sales Funnel
A i i iAcquisition
PayingPayingCustomers
$
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Distribution ChannelsHow Does the Product Reach the Customer?
Acquisition
PayingPayingCustomers
$Distrib. Channel
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Distribution ChannelPick One
System Integrators
OEMs
Y Your
Direct Sales Force
Value-Added Your Company
CustomersValue Added
Resellers (VARs)
Dealers
Distributors
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Retail/Mass Merchants/Online
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The Sales FunnelEnterprise Software
L dQualified Lead
Leads
Paying
First Sales Call
Demonstration
Feasibility PayingCustomers
$
Proposal
Purchase Order
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The Sales FunnelWeb Funnel
A i i iRegistered
Acquisition
Paying
Log in
First Conversation
5 Conversations PayingCustomers
$
Paid Once
Subscription
Revenue
Activation
Retention
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AARRR: Web Marketing MetricsSEO Campaigns, SEO
SEM
Apps & Widgets
Affiliates
PR Biz DevContests
Direct, Tel, TV
Social Networks
Blogs
Viral LoopsViral Loops
QUISITIONACQUISITIONWidgets TV
Domains
Emails & Alerts Emails & widgetsEmails & widgets
Blogs, RSS, News Feeds
Affiliates, ContestsAffiliates, Contests
Biz DevAds, Lead Gen, Subscriptions, ECommerce
System Events & Time‐based Features
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Website.com
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Analyze The Funnel Over Time100%
52.7%
80%
90%Registered but didn’t login
43.3% 48.5% 48.2% 47.3% 46.4%
42.5%
49.2% 44.7%
42.2% 43.7% 43.8% 47.6%
70%
80%
Registered but didn't
15.4%
13.8% 14.9% 16.6% 16.4%
16.1% 16.8% 15.5% 15.7% 20.0%
15.7% 14.2%
50%
60%
Login but no conversation
19.1% 16.9% 16.6% 16.8% 17.5%
19.3%
15.1% 13.2%
20.3% 19.5% 19.5%
17.0%
16.3%
12.6%
30%
40%Logged in but didn't have
Had one convo but not fiveHad 1 conversation but not 5
20.7% 19.5% 19.1% 18.1% 18.4% 20.9%
19.3% 21.2% 19.7% 20.0% 19.7%
16.7% 20.9%
10%
20%
Had five convos but didn't pay
Had 1 conversation but not 5
Had 5 conversations but didn’t pay
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1.5% 1.2% 1.1% 1.3% 1.2% 0.9% 1.0% 1.2% 1.4% 1.0% 1.0% 1.3% 0.6%0%Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-0
Had 5 conversations but didn’t payPaid
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Cohort Analysis of the FunnelCohort Analysis of the Funnel
45%
50% Retention of activeusers whoregistered 30-60days agoRetention of active
35%
40%users whoregistered 60-90days agoRetention of activeusers whoregistered 90-120
25%
30%days ago
This plot measures retention by calculating the fraction of 'active'
15%
20%
calculating the fraction of active users who had a conversation in the preceding 30 days. Active users are defined as having had at least 5 conversations total.
5%
10%
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0%1/1/06 1/31/06 3/2/06 4/1/06 5/1/06 5/31/06 6/30/06 7/30/06 8/29/06 9/28/06 10/28/06 11/27/06 12/27/06
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A Sales Funnel is Great if You Have OneA Sales Funnel is Great if You Have One
• You should be so luckyYou should be so lucky
• How do you get a sales funnel?
h d hi ?• Who do you hire?
• How do you start?
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Customer DevelopmentCustomer Development
Scale Company
CustomerDiscovery
CustomerValidation
Customer Creation
• To get a funnel you need to have a deep understanding of customers• Use the Customer Development methodology to get started
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