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Startup

Guide
2013 Edition

The

SHARE FREELY

Building a Better World Through Entrepreneurship

RYAN ALLIS With Ellen Daly


CEO of Connect.com
More slides at www.startupguide.com

STARTUPGUIDE.COM

CUSTOMER ACQUISITION

Entrepreneurship

519

CUSTOMER ACQUISITION BUILD A CONVERSION FUNNEL

BUILD A REAL-TIME CONVERSION FUNNEL TO TRACK RESULTS


MONTHLY UNIQUE VISITORS MONTHLY FREE USER SIGNUPS MONTHLY NEW PAYING CUSTOMERS

1,124,194 20,241 3,400


16.8%

100% 1.8%

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520

CUSTOMER ACQUISITION BUILD A CONVERSION FUNNEL

TRACK USER ACQUISITION COST AND CUSTOMER ACQUISITION COST


EXAMPLE: NEW USERS ACQUIRED NEW CUSTOMERS ACQUIRED SPENT ON ADVERTISING COST PER NEW USER COST PER NEW CUSTOMER
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MARCH 2017 20,241 3,400 $1,000,000 $49.40 $294.11


521

CUSTOMER ACQUISITION CALCULATE CAC

IF You dont KNOW YOUR CUSTOMER ACQUISITION COST its really DIFFICULT TO

ACQUIRE CUSTOMERS
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CUSTOMER ACQUISITION CALCULATE CUSTOMER LTV

IF You dont KNOW YOUR CUSTOMER LIFE TIME VALUE (LTV) Its hard to scale

Customer acquisition
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CUSTOMER ACQUISITION CALCULATE CUSTOMER LTV

At icontact we acquired 1.1 million TRIAL users

And 70,000 paying customers For our email & social marketing SERVICE From 2006-2012
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CUSTOMER ACQUISITION EXAMPLE: CALCULATE LTV

ROUGH EXAMPLE OF WHAT YOU CAN SPEND TO ACQUIRE A NEW RECURRING CUSTOMER
Monthly Revenue Recurring Customer
$50

Average Customer Life


48 Months

Lifetime VALUE (LTV)


$2400
(50 x 48)

What You Can Spend to Acquire a New Customer


Up to $800
(1/3rd of LTV)

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CUSTOMER ACQUISITION EXAMPLE 2: CALCULATE LTV

An EXAMPLE OF WHAT YOU CAN SPEND TO ACQUIRE A Non-recurring CUSTOMER


Average Number Average of Purchases Purchase Price Within 3 Years NonRECURRING Customer
$50 6

3 Year Revenue Estimate


$300
(50 x 6)

What You Can Spend to Acquire a New Customer


Up to $100
(1/3rd of 300)

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526

CUSTOMER ACQUISITION SCALE YOUR AD BUDGET SCIENTIFICALLY

SCALE YOUR AD BUDGET SCIENTIFICALLY BY TRACKING LEAD ACQUSITION COST & CONVERSION RATE BY ADVERTISING CHANNEL
STARTUPGUIDE.COM 527

CUSTOMER ACQUISITION TEST NEW CHANNELS

10%-15% of your MONTHLY Advertising budget Should be spent on TESTING NEW CHANNELS
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CUSTOMER ACQUISITION ONLINE MARKETING CHANNELS

ONLINE MARKETING CHANNELS


SEO GOOGLE, YAHOO, BING PPC - GOOGLE Adwords / BING ADCENTER SOCIAL PRESENCE FACEBOoK, TWITTER, youTUBE SOCIAL ADS FACEBOOK, TWITTER, Youtube ADS SOCIAL NETWORK INVITE SYSTEMs AKA GROWTH HACKING DISPLAY BANNER ADVERTISING AFFILIATES CJ & LINKSHARE Review SITES YELP, CITYSEARCH, GOOGLE LOCAL DAILY DEALS GROUPon & LIVING SOCIAL EMAIL FOLLOWUP iCOntact & MAILCHIMP
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CUSTOMER ACQUISITION GROWTH HACKING

GROWTH HACKING IS USING VIRAL NETWORK EFFECTS TO INCREASE USER ACQUISITION AND ALLOWING YOUR USERS To EASILY INVITE THEIR FRIENDS ON SOCIAL NETWORKS
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CUSTOMER ACQUISITION OFFLINE MARKETING CHANNELS

OFFLINE MARKETING CHANNELS


TELEVISION PRINT ADVERTISING RADIO YELLOW PAGES DIRECT MAIL TRADESHOWS EVENT SPONSORSHIPS BILLBOARDS CAMPUS REPS
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CUSTOMER ACQUISITION TEST ALL CHANNELS

THE KEY IS TO TEST ALL OF THE CHANNELS AND TRACK THE ACTUAL RESULTS FROM EACH ONE
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CUSTOMER ACQUISITION KEYS TO SUCCESS WITH MARKETING

THE 6 KEYs TO SUCEESS WITH MARKETING ARE


1. 2. 3. 4. 5. 6. AMAZING WORD OF MOUTH FROM A GREAT PRODUCT KNOWING THE LIFETIME VALUE OF A CUSTOMER A TRACKING SYSTEM THAT CAN TELL YOU COST PER LEAD PER CHANNEL A TRACKING SYSTEM THAT CAN TELL YOU CONVERSION RATE PER CHANNEL CONSTANT TESTING OF NEW CHANNELS, CREATIVE, AND FUNNEL PROCESSES GREAT STORYTELLING
533

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CUSTOMER ACQUISITION INCREASING Customer ACQUISITION

TO INCREASE CUSTOMER ACQUISITION

1. CALCULATE COST PER LEAD & COnVERSION RATE BY CHANNEL 2. DETERMINE WHAT YOU CAN PAY PER NEW CUSTOMER 3. TEST NEW ADVERTISING CHANNELS SCIENTIFICALLY 4. CREATE A PREMIUM VERSION OF YOUR PRODUCt 5. TEST DOUBLING YOUR PRICE AND SEE WHAT HAPPENS 6. GET MORE AFFILIATES/DISTRIBUTORS 7. OPEN UP MORE SALES OFFICES 8. OPEN UP MORE RETAIL LOCATIONS 9. BUILD ADDITIONAL PRODUCTS 10. HIRE MORE SALES PEOPLE 11. HIRE SOMEONE TO SELL MORE TO EXISTING CUSTOMERS 12. RAISe CAPITAL AND EXPAND YOUR ADVERTISING
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CUSTOMER ACQUISITION ACQUIRING CUSTOMERS

A business is not a business UNTIL IS HAS

PAYING CUSTOMERS
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CUSTOMER ACQUISITION WHAT IS A BRAND?

A BRAND IS SIMPLY THE AGGREGATEd SUM TOTAL OF EVERY Human BEINGS EXPERIENCE WITH YOUR COMPANY & PRODUCTs
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CUSTOMER ACQUISITION WHAT IS MARKETING?

MARKETING IS ENSURING THAT THE RIGHT PEOPLE HAVE HEARD THE RIGHT THINGS ABOUT YOUR PRODUCT AND ORGANIZATION
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CUSTOMER ACQUISITION WHAT IS GOOD MARKETING?

GOOD MARKETING IS JUST GOOD STORYTELLING ACROSS MULTIPLE MEDIA IN A TRACKABLE AND FINANCIALLY

SCALABLE MANNER
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CUSTOMER ACQUISITION MARKETING vs. SALES

MARKETING IS GENERATING AN INTERESTED LEAD. SALES IS TURNING THE LEAD INTO A CUSTOMER. ACCOUNT MANAGEMENT IS TURNING A CUSTOMER INTO
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A LIFETIME EVANGELIZER.

539

CUSTOMER ACQUISITION BUILD A GREAT PRODUCT

IN TODAYs WORLD MARKETING STARTS WITH

PRODUCT DEVELOPMENT
540

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CUSTOMER ACQUISITION MARKET A GREAT PRODUCT

YOU CanT SUCCEED FOR LONG MARKETING

A BAD PRODUCT
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CUSTOMER ACQUISITION STOP MARKETING A BAD PRODUCT

SO IF Youre marketing A BAD PRODUCT

STOP
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CUSTOMER ACQUISITION ONLY BUILD GREAT PRODUCTS

AND PUT YOUR FUNDS INTO BUILDING A

GREAT PRODUCT
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CUSTOMER ACQUISITION STORYTELLING AS MARKETING

THEN WHEN YOU HAVE A GREAT PRODUCT

START STORYTELLING
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Startup Guide
2013 Edition

The

SHARE FREELY

Building a Better World Through Entrepreneurship

RYAN ALLIS With Ellen Daly


CEO of Connect.com
More slides at www.startupguide.com