Class 5 / 12

March 3, 2014

Jen van der Meer | jd1159 at nyu dot edu

Josh Knowles | chasing at spaceship dot com

LEAN LAUNCHPAD AT NYU ITP

Rockets Sketches borrowed from Harry Allen Design

Teams present

Guest Speaker Albert Lee

Get Keep Grow

TODAY:

.

WE ARE HERE

1/27Business ModelsCustomer DevelopmentUX Tools Intro

2/3Value PropositionUX Tools, Frameworks

2/10Customer SegmentsResearch Tools

2/17President’s Day

2/24Revenue StreamsDistributionProduct Definition

3/3Customer RelationshipsPartners,Product Development

3/10 Resources, Activities, Costs,Product Development

3/17Spring Break

3/24Customer DevelopmentProduct Development

3/31Customer DevelopmentProduct Development

4/7Customer DevelopmentProduct Development

4/14Customer DevelopmentProduct Development

4/21Product MVP

4/28Lessons Learned

What are the 3 components?

Get

Keep

Grow

(The most important hypothesis)

CUSTOMER RELATIONSHIPS

What’s their role

Who are they

How do they buy

What matters

What pain is being solved for them

CUSTOMER ARCHETEYPES

CUSTOMER RELATIONSHIPS: DIGITAL

CUSTOMER RELATIONSHIPS: PHYSICAL VS DIGITAL

STRATEGY + TACTICS

Physical Digital

GET Strategy: Awareness, interest, Consideration, Purchase

Tactics: Earned Media, paid media, online tools

Strategy: Acquire, activate

Tactics: Websites, appstores, search, email, blogs viral social nets, reviews, pr, free trials, home/landing page, webinars

KEEP Strategy: Interact, Retain

Tactics: Loyalty programs, product updates, customer surveys, customer check-in calls

Strategy: Interact, retain

Tactics: Customization, user groups, blogs, online help, product tips, bulletins, outreach, affiliates

GROW Strategy: New revenue, referrals

Tactics: upsell, cross sell, referrals, unbundling

Strategy: New revenue, referrals

Tactics: upgrades, contests, reorders, refer friends, upsell, cross sell

THE VIRAL LOOP

How much will it cost us to get an “activated” customer?

“CAC” is cost of all of your sales and marketing expenses over a given period of time, divided by the number of customers acquired in that window.

Why this is valuable – test different tactics against each other, and understand how to create a customer acquisition system with you at the help of the inputs.

Bessemer Cost of Customer Acquisition:

http://www.bvp.com/sites/default/files/cac_ratio_-_one_number_to_manag__your_saas_sm_spend_-_october_2008.pdf

CUSTOMER ACQUISITION

CAC Ratio 1Q2015 = [Gross Margin (2Q15) – Gross Margin (1Q15)] *4

Sales and Marketing Costs (1Q15)

The CAC ratio determines the payback time on your sales and marketing investment: a CAC ratio of 0.5 for example means that half of your investment is paid back per year, so it is a two year payback period.

Bessemer Cost of Customer Acquisition:

http://www.bvp.com/sites/default/files/cac_ratio_-_one_number_to_manag__your_saas_sm_spend_-_october_2008.pdf

CAC RATIO

The viral co-efficient: the average number of invitations sent by each existing user times the conversion rate of invitation to new user. The viral coefficient is referred to as the K value.

THE MAGIC ACCELERATOR: THE VIRAL LOOP

Lean Analytics, Alistair Croll, Benjamin Yoskovitz

SAAS CUSTOMER LIFECYCLE

Google Forms – free but you have to find your list

LinkedIn Polls

Free: if you’re already connected to your audience

Fee: to survey a specific demographic

Paid Survey Audience

B2B: Thinkspeed.com $3 - $5k survey design based on audience

B2C: SurveyMonkey.com/mp/audience: $3.00 per finished response for standard demographics, requires a $20 professional plan

Buying Facebook audiences (requires a FB account)

TESTING BEFORE YOU HAVE A PRODUCT

What are your priority segments?

What are your value proposition hypotheses?

What is your call to action in your marketing test?

Where will you test?

KEY MARKETING LEVERS TO TEST

17

Strategic alliances

– Social media software and WPP, Omnicom, Publicis

Joint new business development efforts

– Intel inside, Retail co-ops

Co-opetition

– Industry week (adweek, fashion week)

Key supplier relationships

– Historical relationship between Microsoft, Dell, and

PARTNERS

Hypothesis to get:

Acquisition

Activation

What is your hypothesis to keep:

Outreach

Events

Loyalty

Product updates

What is your hypothesis to grow:

Upsell

Cross-sell

Next-sell

Referrals

WHAT WILL YOU TEST?

20

WHAT CAME BEFORE STEVE AND ERIC

FOR POST SPRING BREAK

.

NEXT WEEK PREP:

REFINE YOUR SEGMENTS – EVERYONE’S SEGMENTS ARE TOO BROAD.

Watch Lecture on Activities, Resources and Costs

Read: Business Model Generation 226-261.

Presentation:

· Cover slide

· Latest version Business Model Canvas with changes marked

· Results of last week’s experiments. What passed, what failed, what did you learn?

· Proposals for next week’s experiments. What constitutes a pass/fail signal for each?

NEXT: CANVAS REVIEW AND FEEDBACK