Growth Hackathon: KelloggMaximize the Growth of Your Most Valuable Customers

Mark Andersen Prasanna Vinjamuri Lauren Anderson

May 7, 2015

Lean Canvas

Who will be the Instagram for Video?

Neither!

What Happened?

Lack of Product-Market Fit is a company-killer!

Product-Market Fit

“Product/market fit means being in a good market with a product that can satisfy that market.” – Marc Andreessen

What is a good Market?• a large number of potential users• high growth in # of potential users• ease of user acquisition

• 40% or more will be unhappy or miss it if withdrawn• Some segment of users in the overall market switch to

your product• Users who’ve “rejected” the products in the market

willing to try your product• Underlying metrics (DAU/MAU, +1 week retention,

etc.) tell the story

What is a Product that satisfies it?

How to go about achieving PMF?

Iterating through Models

MVPs and Metrics

A meaningful metric captures a moment of value for the customer and the business.

Defining success metrics:“accounts created” vs. “number of accounts where users share a post”

Marketing: Personas & Customer Journey Maps, WOM, User Groups

• Create personas & then a customer journey map (storyboards) for every key persona showing their key experiences

• Word of mouth (WOM), PR & invite flows are excellent forms of acquisition. WOM is always the easiest & cheapest growth.

• AirBnB turns their users into their own distribution networks: through the click of a button you can post your listing to Facebook, Twitter, LinkedIn...

Content Marketing & Social MediaOnline petitions: CREDO Mobile's 275,000 Likes on FB

Marketing: Content Marketing & SEO

Identify your most valuable customers & create content they crave: Credo Mobile example, Salesforce, HubSpot, KISS Metrics..

• Inbound links from high authority sites, page rank

• Site architecture: title & description tags, anchor text, descriptive URLs, "Mobilegeddon"

• Link-rich, transactional keyword-focused content pages: setup persona-based keyword groups targeting your most valuable users

• Keyword research is key: (1) What do people search for that's related to your site; (2) How many people search for it; (3) How many other people are ranking for it; (4) How valuable is it for you?

Analytics: Retention Rate

• Customer retention is important because long term customers tend to spend more, cost less, and provide referrals

• Retention can come at different points in a customer lifecycle i.e. monthly subscription vs annual subscription

• Retention Rate is calculated as: (# of customers EOP - # of customers acquired ) Total number of customers BOP

• EOP – End of Period • BOP – Beginning of Period

Analytics: Lifetime Value

• Expected profit realized from sales to a particular customer in the future based on past customer history

• Can be calculated at the cohort level at time of acquisition and at the individual customer level

• Examples of Uses – Target customers based on high and low LTV values – Evaluate proposed marketing programs and its effects

on retention, spend, and overall LTV

Analytics: Lifetime Value Example

Analytics: Net Promoter Score

• An index that measures the willingness of customers to recommend a company to others

• Used to gauge overall satisfaction and brand loyalty

• “On a scale of 0 – 10 , how likely are you to recommend this company’s product or service to a friend or colleague.”

• Scoring: – Detractors score 0 – 6 – Passives score 7 – 8 – Promoters score 9 – 10 – NPS = % Promoters - % Detractors

Analytics: Net Promoter Score

• Example NPS scores: – Laptops: • Apple +72 • HP +46

– Airlines: • Southwest +62 • US Airways -8

– Cable: • DirecTV +34 • Comcast -3

Appendix

• Start in your smallest segment possible, monopolize it & then expand ("competition is for losers": Thiel)

• How is your product unique & better?

• Do things that don't scale: build out an awesome experience before coding it (YC)

• Live user testing/customer support is key: quantitative & qualitative; focus on finding the big problem

Growth Strategy

• "Product/market fit means being in a good market with a product that can satisfy that market": Marc Andreessen

• "Make something people want": Paul Graham (Y Combinator)

• "Make insanely great products": Steve Jobs

• "A great brand is a promise of benefit that's persuasive and unique": David Ogilvy

How do you know if you have it?

• Would at least 40% of your customers say they'd be "very disappointed" without your product (Survey.io)

• Clearing Net Promoter Score (NPS), retention and lifetime net value hurdles

• Word of mouth is one of your biggest acquisition channels; virality (K value > 1)

Product/Market Fit

• How are you measuring your product/market fit?

• Are you clearly communicating your unique, compelling value proposition?

• Who are your most valuable customers?

• What early behavior are your most valuable customers doing that's most predictive of success?

• How quickly are you getting your users to their aha! moment?

• How can you build virality inherently into your product?

Product & Marketing Questions