mike mcderment - marketing metrics and the systems you need to measure them
Post on 18-Oct-2014
11.671 views
DESCRIPTION
Mike has grown FreshBooks from a one-man startup to a 30-person Web app company. He's going to teach you six essential terms that you need to understand in order to succeed with your app: 'Lifetime Value', 'Average Revenue per User', 'Churn', 'Gross Cost per Acquisition', 'Sales Funnel' and 'Customer Vintages'. He's then going to give an example with a real-life case study. This is one you can't afford to miss.TRANSCRIPT
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“Flight systems”
@MikeMcDerment – Co-Founder and CEO
Feb 23, 2010 – #fowa
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Thank You
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Mike McDerment
Co-founder, CEO
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True or False:
Technology is the hardest
part of building a web app
business?
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False
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Flight SystemsMetrics and systems to help you navigate web
app success.
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… THE LEADER IN ONLINE
BILLING AND BOOKKEEPING.
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Customer Types
Team RecurringSolo
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Now for Web Apps!
Recurring billing managed inside your app
Accept credit cards inside your own app
Real-Time payment notifications ( WEBHOOKS! )
http://developers.freshbooks.com/
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Over 1,000,000 Users Since May 2004
Month
Use
rs
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Let me apologize in
advance…sorry aboot the
MBA speak
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• “How much do we spend to get a customer?”
• Cost Per Acquisition ($) CPA
• “How much do our customers pay us?”
• Average Revenue Per User ARPU
• “At what rate are customers cancelling?”
• Churn (%) Churn
• “How much is a customer worth over time?”
• Lifetime Value Per Customer ($) LTV
Key Metrics for Web Apps
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CPA
ARPU
Churn
LTV
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Why is not enough.
Less accurate
Less flexible (can’t slice and dice)
Can’t correlate to app usage/events
Too important to outsource
Tied to a vendor
Besides…It’s easy!
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Three systems to rule them all.
Reporting
DB Storage
Cookie Tracking
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Cookie Tracking
Variables to track
Unique URL’s
Cookie Code
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Referring Domain ( who sent them here? )
Ref URL ( what are their interests? )
Landing URL ( campaign, partner, ad unit? )
What to Track ( barebones ) and why.
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Data Base Storage
Add a table to
your Database
Store alongside
user profile
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Search
Sort
Dump
BONUS! Dashboard
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How does a marketer get the data
from a database?
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Search it.
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Sort it.
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Dump it.
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Web Application
Business model is “Freemium”
$10,000 per month marketing budget
6 month campaign
Case Study Assumptions
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0
25
50
75
100
Jan Feb Mar Apr May Jun
Gross New Customers Acquired by Month
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0
25
50
75
100
Jan Feb Mar Apr May Jun
Gross New by Marketing Spend (Vintages)
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What we learned
100 customers per vintage
CPA of $100 ($10,000/100)
6 month close <- MASSIVE INSIGHT!!!
50% / 25% / 10% / 5% / 5% / 5%
What else could we know?
ARPU, LTV
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Too important to outsource
It’s about data collection, not reporting
It’s easy
Parting Thoughts on Flight Systems
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Flight SystemsMetrics and systems to help you navigate web
app success.
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Questions? Bring em!
Twitter: @mikemcderment
Email: [email protected]
Check out FreshBooks if you are building a web app!
http://developers.freshbooks.com
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Choose your own adventure.
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6 month campaign
Spend Visitors Trials
January $10,000.00 10,000 1,000
February $10,000.00 10,000 1,000
March $10,000.00 10,000 1,000
April $10,000.00 10,000 1,000
May $10,000.00 10,000 1,000
June $10,000.00 10,000 1,000
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What your marketer gets…
Hands on the wheel
Self service
Easy access to excel
The data they need, when they need it!
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How many customers did we get?
# new customersGross New
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Who are our most valuable customers?
Where did we get them?
How do we get more?
These systems help answer
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Marketing
Spend
Visitor
Lead
CPA
ARPU
Churn
LTV
Paying
Customers
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Simple Conversion Funnel
CPA
ARPU
Churn
LTV