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E245 Demand Creation Ann Miura-Ko
January 2011
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Agenda
Demand Creation Definition
Direct customer relationship
Indirect customer relationship
Metrics and Experimentation
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3images by JAM
customer
segments
key
partners
cost
structure
revenue
streams
channels
customer
relationships
key activities
key
resources
value
proposition
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Test
Hypotheses:
Problem
Customer
User
Payer
Test
Hypotheses:
Demand
Creation
Test Hypotheses:
Channel
Test
Hypotheses: Product
Market Type
Competitive
Test Hypotheses:
Pricing Model / Pricing
Test Hypotheses:
Size of Opportunity/Market
Validate Business Model
TestHypotheses:
Channel
(Customer)
(Problem)Customer
Development
Team
Agile
Development
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CUSTOMER RELATIONSHIPS
what relationships are you establishing with each segment?
personal? automated? acquisitive? retentive?
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Demand Creation
How will customers segments hear about
your product?
How does market type impact my strategy?
How much will it cost to acquire a customer using these strategies?
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Market TypeExisting Resegmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational
improvement
Competitors Many Many if wrong,
few if right
None
Risk Lack of branding,
sales and
distribution
ecosystem
Market and
product re-
definition
Evangelism and
education cycle
Examples Google Southwest Groupon
Market Type determines:
Rate of customer adoption
Sales and Marketing strategies
Cash requirements
How does market type influence demand creation?
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Demand Creation by
Market Type
Create, drive demand into
your sales channelExisting
Resegmented
New
Educate the market aboutwhat¶s changed
Drive demand into your sales
channel Educate the market
Identify and drive early
adopters into your sales
channels
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Who needs to hear about you?
Suppliers
Channels
Government
Partners
End User
Influencer /
Recommender
Economic Buyer
Decision Maker
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Demand Creation Feeds
the Sales Funnel
Paying
Customers
$
DemandCreation
Acquisition
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Agenda
Demand Creation Definition
Direct customer relationship
Indirect customer relationship
Metrics and Experimentation
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Getting Free Users
SEO (without consultants)
Blogging / Sharable content
Social Media / Gaming
Mechanics
Communities Proven viral coefficient > 1
NOTE: ³Viral´ isn¶t a strategy, it¶s a product feature you either
have or you don¶t
DemandCreation
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Paid Channels
PR
Demand Capture- SEM
- ³Free´ products (e.g. widgets)
- Biz Dev- Affiliate Marketing
Market Education- Webinars
- Email marketing- Trade Shows
- Analyst Reports
- Direct Sales
- TV / Radio
Demand
Creation
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How many come
through the first step?
How much does that
cost?What is the
conversion between
each level?
How much inrevenues can you get
out of each acquired
customer?
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Agenda
Demand Creation Definition
Direct customer relationship
Indirect customer relationship
Metrics and Experimentation
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Healthcare ± system requirements
FDA
Payer Approval of product category
Compelling clinical benefits
and cost reduction
Product approval
Manufacturing approval
Quality control process
approval
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Healthcare & Marketing
Free samples
Professional papers
Speeches by leading academics andinfluential doctors
Leading institution as referencecustomer
Conference presentation
Continuing medical education
Product
Champions
FDA
Restrictions on user generated
content
- Adverse event postings
- Off label use postings
Restrictions on direct selling to
doctors
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Critical questions
What are critical regulations and approval
processes that need to happen prior to
launch of product?
- Industry
- Federal / State
Are there regulations on marketing efforts
as well?
Who influences the purchasing decisionand how can they become an ally?
- What is required to be endorsed?
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Agenda
Demand Creation Definition
Direct customer relationship
Indirect customer relationship
Metrics and Experimentation
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Customer Acquisition Cost
Paying
Customers
$
DemandCreation
Acquisition
To get onecustomer here
How much do you haveto spend here
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The Sales FunnelEnterprise Software
Leads
PayingCustomers
$
Q
u a l i f i e d L e a d
F
i r s t S a l e s C a l l
D
e m o n s t r a t i o n
F e a s i b i l i t y
P r o p o s a l
Purchase Order
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Other Sales Funnels
What does your funnel look like?
How long does each part of the funnel
take?
What % converts between each section?
Visit Sign Up Activate Upgrade
InformationalMeeting
Trial ContractNegotiation
SignedContract
1.
2.
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Cost of Customer Acquisition
Calculation
David Skok
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Cost of Customer Acquisition
Calculation