WEB

ANALYTICS
AND DIGITAL
MARKETING
ESIG: CONVERSION FUNNEL
A NA LY S I S
For each major marketing medium – direct traffic, email, organic search, and paid ads –
how have conversion rates from account created to paid upgrades been trending? What
are your hypotheses about factors behind conversion rate trends?
CONVERSION RATES: In accounts created, we have added all the
values of 0-created, 1 – Activated and 2-
Activated to get the overall accounts that are
created till now.
And then we have got the conversion rate by
applying the formula =
(2-Activated /Accounts created) * 100

Managerial Insights:
 The conversion rate is highest from Direct traffic source.
 It means customers who are actually interested in the product and are aware about the website, prefer to
create an account by directly going to the website. One of the hypotheses can be that customers generally do
not convert on their very first visit to the website. A return visit is most likely to happen before conversion,
one of the easiest way to return is by typing the part of the website URL and the web browser then auto – fills
the remaining part of the URL and the user end up directly visiting the website. Or we can say that there are
some unknown sources which was not identified by analytics.
 As it is a freemium model, so the conversion rates are low
 What might explain changes in the number of accounts created via direct
traffic over time? In accounts created via organic search?

 From the time series graph its clear that in in the initial years, direct traffic had resulted in more number of the
accounts created than the organic search, but since October they are on the same path. There is a fall in the November
as the data is only for 18 days not the whole month.
 We can see a sudden peak in September in organic search, Paid ad clicks may lead to increased links, mentions,
coverage, sharing, etc. that can boost organic rankings. Content marketing also plays a role in paid search ,it’s known
more for its impact in search engine optimization. That’s because content created for content marketing often takes an
informational and educational approach. Users respond well to this kind of content.
 And for Direct traffic, we can see a curve which increases and the after a peak it falls, Direct traffic can be linked to
online or offline advertisement, Word of mouth also form as a part of it or customer are aware of website
Does eSig benefit from virality? What is your estimate of the viral coefficient
for a free account? What can we do to increase virality?

 Viral Coefficient: The viral coefficient is the number of new users the average customer
generates. The viral coefficient is not simply the number of referrals a customer makes, it’s the
number of those referrals that convert into customers.
 Viral coefficient = [Number of invitations (referrals) sent * Conversion rate of referrals]
/Number of Initial customers
 Page 1 of the case says that at start of Feb. 2015, 70000 registered users were there. These are
the customers who would have send invitations to the others resulting in 0-create/1- activated
customers in next few months
 “Share link” is the medium in which existing customers send invitations/ influence others to
sign up (from the excel definition)
 Assumption: We assume that users created via “Share link” in all 3 types (0 – created, 1 –
activated, 2 – activated upgraded) for 9 month period are result of invitation by 70000 existing
user base.
We need to measure the viral coefficient for free account. Here, we have assumed free account to be
the users who not only have created but have also activated the account and are using the free
services of our product.

Number of users converted = 3190

Number of initial Customers = 70000
Viral coefficient = (3190/70000) * 100 = 4.56%

From the virality coefficient, we can say that it is poor, and the company is not getting much benefit
from it and the pro upgrade rate due to share link is merely 0.17%

Ways to increase virality:

1. If we want to increase the virality then we can offer a free month of eSig pro for every user they
influenced to activate the account and actually use it not for just signing up
2. And offer some additional free sign if the user they referred upgraded to the pro account after
first 30- day free trial
3. Any specific reward should be given when the user reaches a specific count of users invited 
Have our investments in paid marketing been yielding a good return?
In this, we will measure the ROI on the basis of the users eSig company acquired directly from paid advertising, and we will
not measure its indirect impact on other sources.
There are two ways to measure the return:
1. ROI = (Profit from the paid users converted/Total cost incurred in paid advertisement) * 100
2. We can compare the return on the basis of the cohort analysis by medium
For the first method, we have the paid users who upgraded to the premium.
Total number of paid user obtained from paid sources are 3318 and from the below calculation it is clear that ROI is not at
all good, we are in loss

And on the basis of the second method, we can analyse from “cohort analysis by medium Excel sheet”, that
cumulative upgraded percentage by month on the basis of the total accounts created is just 2.2%, we need to
increase our conversion rates and analyse our paid marketing channel in detail, to understand the sources which are
responsible for this low return
(Note: We have not taken into account all the users, as they all are obtained from different sources and we don’t have
information about the paid ads impact on other sources)
Detailed Analysis of Paid Advertising
For the detailed analysis of paid advertising, we have two ways to analyse sources under paid
advertising:
1. CAC of each source (on the basis of the pro customers acquired from that source)
2. Comparing the sources on the basis of Cumulative upgraded percentage by month based on total
accounts created (given in cohort analysis by paid source sheet)
Interpretation:
 On the basis of cost per upgraded user, Bing AdCenter cost us less as compared to the other sources
but this is not among the major contribution to the pro users.
 We can see two contradictory things here, Google AdWords cost us around $80 and 7.5% of its
created users get converted to pro account whereas Facebook whose cost is high and only 1.8% of
users get converted to pro account but they contribute the most to the total paid pro users i.e. around
72%. The conclusion we can draw from here is that we had to invest a lot on Facebook to get paid
users and in the past we have invested around 12.5 Million to get few paid users. So we need to
advertise more on Google AdWords and optimise our advertisements on Facebook
Ad.com and Outbrain haven’t bought a single user, so we can avoid investing in these sources as well
as at GDN
Live Intent is a source from which we got the user but haven’t invested anything. So, we can try
investing in this source.
 Cost per upgraded user for sources like Content.ad, Taboola, GDN is high, it doesn’t mean that they
are the one in which we spend a lot, but it means the number of pro users we are getting from these
sources are so low, which make CAC per user so high
Our contractors have produced a steady stream of 1-2 blogs posts per week
over the past year at a total costs of $5000. Was this a good investment?

 eSig made an investment of $5000 on blogs but the return in the form of gross margin they received only
$31.6. And the conversion rate is 1.19%, which is too low and the Cost of acquisition per user upgraded is
$5000, which is too much.
 But blogs also has an impact on other sources as organic search and the users from organic search who has
upgraded to Pro account are 902, we do not have any information to understand this link, but we can try to
analyse the blog impact on organic search either by not writing blogs (in case users from organic search
falls) or by increasing the investment (in case they rise)
What’s your current estimate for the lifetime value of an eSig Pro customer? What’s
the most we should spend on paid marketing to acquire a pro customer?
Lifetime value of eSig Pro Customer
Gross margin = 79%
eSig pro charges = $10 per month
Annual Retention Rate = 87% & Annual Churn Rate = 13%
Total Customer Acquisition Cost = $13,90,418 (Expenditure till September)
Number of Pro users acquired = 11118
CAC Per User = 125.06
LTV = ($10 * 79% * 1 /13%) = 60.77
Calculating the worth of the customer on the basis of the cost of acquisition per customer.
CLTV = LTV - CAC
CLTV =60.77– 125.06 = $-64.29
The most we should spend on paid marketing should be <60.77, then only we can earn some profit, any expenditure
equal to 60.77 leads to no profit no loss and anything more than Lifetime value will bring losses.

Assumption: In this, we are going by the aging pattern sheet so in order to determine the lifetime value of pro
customers, we will take the expenses till September and will calculate the number of pro users, each month
advertisement will generate in Next 9 months. In order to compare the expenditure of Feb with September, we
will make use of Cohorts to get the expected number of pro users in the future, on the basis of today’s expenditure.
With this, we can lower our CAC and can do the analysis.
How confident are you that we can profitably triple our account base in 2016?
In this we need to look upon two points:
1. Triple our account base
2. And do it profitably
So looking at the first aspect, can we triple our base in 2016, for this we will
analyse the growth we achieved in past 10 months from February to November.
Acquired users (Feb – Nov 2015) = 88822 (0 – Created) + 298379 (1- Activated) +
9990 (2- Upgraded) = 397, 191
Growth = 397191 / 70000 = 5.67 times.
So if this growth rate continues then we can triple our user base.
Now the second aspect, can we be profitable in 2016;
Looking at the paying customer alone we have loss of $9,24,036 in 2015
So, in the third table, we can see that if those 9990 users with annual retention of
87% stick to us then we will have the revenue of $8,23,935 through which we can
not even recover our 2015 losses, so if the same scenario continues and we do the
same amount of investment of around 14.5 lakhs in next year, we will not be in
profitable situation.
So, in terms of profitability, unless eSig increases conversion to paying customers,
next year wont be profitable.
What additional research, analysis, and experiments do you plan to do over the
coming weeks to boost confidence in our growth projections?
Research:
 Alpha and Beta testing can be done for the website to enhance its performance
 Find in detail about the direct traffic, as in this there are some sources which are unknown to us and can be
important to optimise in the future.
Analysis:
 We can do analysis about the offline advertisements as how it is impacting our direct traffic or any other resource
 Analysis is to be done on the basis of the long term performance predicted on past results
 Detailed analysis of Facebook Ads, Google Ads (What worked, what not, what led to some sudden peaks)
Experiments:
1. Further investment could be done in the content writing (more number of blogs per week) to see if it works and
increase the yearly budget from $5000 to $10000. And to increase investment in Google AdWords.
2. To do investment in Live Intent to see how it results.
3. To optimize the way we advertise on Facebook and to reduce the expenses on Facebook paid ads
4. And offer some additional free sign if the user they referred upgraded to the pro account after first 30- day free trial
The number of Pro users eSig will have on March 31st, 2016 if we cease all paid marketing on
December 1

So, assuming we had cease all advertising on Dec 1 and on the basis of the cohorts analysis, the number of pro users eSig will have on March 31 st,
2016 will be 11348.
Note: In the above tables, the places that are empty means, the cohort is of beyond March 31st which has not been taken into account.
How much to spend on each paid marketing channel between now and end of Q1 if our
budget is $1 Million.

The months in which we have assumed that we will be spending are from December to March and Budget is
$1 Million. (As this mail was written on 7th November and we have user data till 18th November, so
assumption that spending of November must have been done)
We have allocated the budget on the basis of their past performances and the data we have analysed:
 In paid advertising, Google AdWords, Facebook and Twitter has performed well, So they form the major
chunk of our advertisement.
 On the basis of the conversion rates from account created to paid user, Google Ad Words is the one which
has 7.5% conversion rate. So, we have thought to invest 46% of our budget on Google Ad words.
In case of Facebook, we have seen that we need to invest a lot in order to get few paid users, cost per paid user
is $ 535.35 and its conversion rate is 1.8% We know that CAC per user is high but we cannot ignore this
platform, as the number of pro users from this platform are high in absolute numbers. So we want to optimise
the way we advertise and target and same is the case with twitter
So we thought to advertise on Facebook/Twitter by first going for A/B testing and analysing the data and
trends that why the conversion rate is low (Maybe we are targeting those users who need only few sign per
month so they are not upgrading to pro users, and we need analyse what type of advertisement gets more
impression, views) and on the basis of that we will further advertise on this platform.
We have not taken those sources of advertisement in account whose CAC is high or has not bought in any paid
user like Ad.com, GDN.
And in LinkedIn we hadn’t invested much in past but we got 5 paid users when we once invested in this
platform, so we will invest more here to test whether this platform is capable of generating more paid users or
not.
 And in case of Live Intent, we have one paid user from this source but we haven’t invested anything, so we
will test this source of marketing as well.
The allocation of $1 million is done in keeping in mind the conversion rates, potentiality of the platform, and
past performance analysis.
Persis Bohot
Raj Vijayvargia
Shivani Midha
Siddharth Doshi
Sunayana Baruah
Vanshika Agrawal

THANK YOU