firstmark presentation (10-13) (slideshare)
DESCRIPTION
Will you marry me? Why engagement is the key to maximizing LTV (Lifetime Value). Presented at the FirstMark marketing summit on October 23, 2013.TRANSCRIPT
Will you marry me? Why engagement is the key to maximizing LTV (Lifetime Value)
Presented by: Brent Chudoba, SurveyMonkey FirstMark Online Marketing Summit October 23, 2013
2
• VP, GM of SurveyMonkey Audience
• @SurveyMonkey since Apr. ’09 • Schoology BoD member
@bchudoba brentchudoba.com in/brentchudoba
Hi, I’m Brent
3
• If there was one metric I could increase, at every company where I am an equity holder, it would be engagement
• Engaged users: - Convert at higher rates - Stick around longer
• Because they are getting value • Because they develop higher switching costs
- Tell you about their needs - Tell others about your product
Conversion & engagement optimization
4
• Pure conversion optimization strategies and tactics are incredibly useful, and well defined - Quick to test and simpler to measure - There is often a ceiling on tactical conversion gains
• You don’t typically use conversion to drive engagement • But you always use engagement to:
- Increase conversion - Increase ARPU (average revenue per user) - Increase retention
• And I want to show you why introducing engagement metrics can drive outsized gains
Presentation goal
5
• Provide you with some useful examples and ways to measure and factor engagement into your product, marketing and business intelligence roadmap
Engagement philosophy
6
• If customers get value from your product they will pay you, stick around and grow - If they don’t, they’ll eventually leave
• Engagement is a tool to get users across a set of customer success milestones that translate to value - If a SurveyMonkey customer sends out surveys every year
and gets enough responses to help them make better decisions, they are getting value. How do I help get them to that point?
Conversion optimization example
7
8
2008
9
2013
Tactical Improvements • “Most Popular” badge • Above the fold, simple
feature call outs • Highlight key package
differences • Feature differentiation by
package • Tiered package naming • Simple CTAs • Comparable monthly
pricing shown
Why does engagement matter?
10
11
An engaged user is more likely to convert to a paid user, increase their spend over time, and less likely to cancel their usage of your product than an inactive, unengaged user.
• Do you agree or disagree w/ the statement above?
So, engagement matters
12
13
But, how can we quantify how much engagement matters?
And, how can we impact it?
Quantifying engagement benefits
14
15
• An example shows highly engaged users convert at 4x the rate of less engaged users - Essentially all highly engaged users convert
• Heat map of conversion rates by engagement level:
More
LessLess More
# of Surveys Deployed
# of Respo
nses Collected
16
• Introducing more features and use cases for products creates additional value
• For SurveyMonkey customers who sign up for a paid account, every additional paid feature they use results in a drop in their churn rate
1 M
onth
Chu
rn R
ate
Number of Paid Features Used in First Month
High
Zero Zero Many
How do you drive engagement?
17
Driving engagement
18
• How do you integrate engagement campaigns into your metrics and roadmap? - Identify: figure out what defines an “engaged” user - Optimize: increase the % of users that “engage” - Activate: cherry pick top prospects and help them
succeed
Identify
19
What are your engagement milestones?
20
• Start at the end - When has a customer gotten value from your
product? • Now figure out how they got there
- What are the critical actions that customers go through to reach a full engagement milestone?
Finding your end point
21
• When does your customer… - Login, smile and say, “Wow, this is
awesome. This just saved me a ton of time. This product was worth every penny, and I might even +1 or Like this company and tell a few colleagues how great this is. Yes SMB SaaS product, yes I will marry you!”
Engagement variants
22
• Singular Objective Success Point - 1 main use case, or 1 main user type - “Success” looks similar for nearly all users - Ex: Nearly all SurveyMonkey users are trying to
create a survey and get responses • Variable Objective Success Points
- Multiple user types, varied “success” definitions - Ex: Schoology (students, teachers, administrators,
parents) all have different “success” definitions
Example: SurveyMonkey engagement funnel
23
• What does it take for a user to engage? • We identified that sending out a survey and
getting responses was when a user derived value from our product - We decided that more than just a few test responses
was important • And then we worked through the experience to
figure out how they got there
24
• Sign up for an account
25
• Create a survey
26
• Add a question
27
• Begin collecting responses
28
• Gather responses
Whoa! Awesome. I had no idea over 80% of my team had smart phones
Optimize
29
Establish baselines, measure results
30
• A metrics driven product agenda starts w/ a baseline understanding of the status quo
• Then tests w/ various experiments to see where it can drive measurable impact
• Lather, rinse, repeat
% o
f New
Use
rs
Time
Reach Engagement Stage 1
Reach Engagement Stage 2
Reach Engagement Stage 3
Reach Engagement Stage 4
Con
vers
ion
Rat
e
Time
Conversion Rate
Something worked here
What works?
31
• Long term engagement wins are rarely easy • Engagement needs to be a success metric that is
factored in to product and marketing goals • Features designed with engagement in mind can
increase engagement
Engaging onboarding experiences
32
• Are designed to get users through the engagement process • Checklists, gaming elements like profile strength are useful for both users
and your business intelligence
Engagement shortcuts don’t exist
33
• There aren’t nearly as many tactics to better engage users as there are to convert them
• You need to earn your engagement, shortcuts lead to red herrings that don’t materialize in conversion
Activate
34
Are all users created equal?
35
• We all know, the answer is no • There are big fish swimming in your pond, and
with the right engagement strategy, they will be massive customers
Do you optimize for big fish? Or all fish?
36
• Your best customers might be worth 10x your average customer
• Are you activating your 10x’rs to make sure they stick around?
How much are your best customers worth?
37
• Certain models necessitate cherry picking top customers to ensure engagement
• If 10% of your customers have the potential to drive 10x+ annual revenue value, you can replicate (or exceed) subscription economics
38
• SurveyMonkey Audience customers transact differently than monthly subscription customers
• They buy projects, so some of them don’t come back • But those who do, are incredibly valuable
1 2 3 4 5 6 7 8 9 10 11 12
Cum
ulat
ive
Rev
enue
Month
Avg. Year 1 Revenue from Repeat Customers
Avg. Year 1 Revenue from ALL Customers
* Actual numbers are confidential, this chart is intended to show the relative impact * Repeat customers includes any customer that purchased in month 1 and any successive month • `
How do you activate your best customers?
39
• The million, or maybe billion $ question • Engagement for 10xrs has even bigger
implications - Special programs to ensure they move through the
engagement funnel are critical - Resourcing to ensure customers w/ $20k+ potential
are successful will often pay huge dividends - And the knowledge of what success means is critical
40
Thank you!
41
Acknowledgements • The SurveyMonkey Business Intelligence team provided all the important
data for this report • They provide all the data and insights that help SurveyMonkey make great
decisions, and they are abnormally cool people, which means we get to have quite a bit of fun while we are at it
• Thank you BI, you rock