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David Skok, funnel design and optimization
The document discusses building a repeatable and scalable sales model for a business. It explains key elements like cost to acquire a customer (CAC) and lifetime value of a customer (LTV) that are important for a profitable business model. The document also discusses how sales complexity impacts CAC, with CAC increasing exponentially as sales processes become more complex and involve human touch. It provides an overview of funnel design and key stages like top-of-funnel awareness generation, middle-of-funnel lead nurturing, and closing deals. Metrics for measuring and optimizing the funnel at each stage are also highlighted.
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David Skok, funnel design and optimization
- 1. Building a SALES &MARKETING MACHINE FUNNEL DESIGN AND OPTIMIZATION CAC ROI by Viral Lead Coefficient Time to Source Recover LTV CAC Churn Rate Viral Cycle Conversion Time Rate
- 2. You’ve heard all about Lean Startup… All about how to get to Product /Market Fit What comes next?
- 3. Search for Product/Market Fit Search for Repeatable & Scalable Sales Model Scaling the Business
- 4. What is a “Repeatable,Scalable Sales Model”
- 5. Three things • Repeatable • Scalable • AND Profitable
- 6. The Key Elements behind “Business Model” • Cost to Acquire the Customer (CAC) • Profit from that Customer over their lifeRme (LTV) There is a common problem: Startup Killer
- 7. An out of balance Business Model Entrepreneurs are over-‐opRmisRc Cost to Acquire a Customer (CAC) Monetization (LTV)
- 8. Simple Customer Acquisi3on Funnel 200 Visitors required for 1 cust Visitors 5% Trial Using Google: At 50c per click 10% Cost: $100 per cust Customer
- 9. Add in People costs:-‐ CAC increases drama3cally Input V ariables Total Web V isitors 10,000 SEM cost per click $ 0.50 Conversion to Trial % 5% Trial conversion % 10% No of Sales & Marketing Staff 3 Cost per e mployee per month $ 16,500 Marketing and Sales people Flow Qty. Conversion % involved: Total Paid Web V istors 10,000 CAC rises to Trials 500 5% Customers 50 10% $1,000 SEM Marketing Spend $ 5,000 Total Headcount Costs $ 49,500 Cost of Customer Acquisition Without headcount costs $ 100.00 With headcount costs $ 1,090.00
- 10. Sales Complexity No Touch Light Touch High Touch Field Sales Freemium Field Sales Self-‐Service Inside Sales Inside Sales with SE’s
- 11. How I assumed the two would relate
- 12. A rough es3mate of CAC versus Sales Complexity No Touch Light Touch High Touch Field Sales Freemium Field Sales Self-‐Service Inside Sales Inside Sales with SE’s Rough Estimates of Cost of Customer Acquisition (CAC) $0-‐ $50 – $1,000 -‐ $3,000 -‐ $25,000 – $75,000 – $10 $200 $2,000 $8,000 $75,000 $200,000
- 13. The rela3onship is roughly exponen3al Clearly adding Human Touch dramatically increases costs
- 14. CAC (logarithmic) 10x 10x 10x Sales Complexity
- 15. SALES & MARKETING FUNNEL DESIGN
- 16. st 1 THE BASICS OF FUNNEL DESIGN
- 17. Expand Suspects Closed Deals Upsell Cross sell
- 18. IN A PERFECT WORLD… 1 Step
- 19. IN A PERFECT WORLD… MyProduct.com DESCRIPTION HOW IT WORKS Our product allows you … Only $9,999.99 BUY NOW!
- 20. THE ART OF MARKETING
- 21.
- 22. THE BUYING CYCLE PURCHASE CONSIDERATION CLOSED DEAL AWARENESS
- 23. TRIGGERS • Moving house • Movers, phones, cable TV, furniture, insurance, etc. • StarRng a new sojware project • PaaS (Plalorm as a Service), Dev Tools, etc. • Need to hire a lot of new employees • Applicant Tracking System • Just lost my data in hard drive crash • Backup sojware/service • Read about a new scary computer virus • AnR-‐virus sojware
- 24. AN ORGANIZATIONAL METAPHOR FORTHE KEY FUNNEL STAGES SALES MIDDLE OF THE FUNNEL CLOSED DEAL TOP OF THE FUNNEL
- 25. WHAT IS TOPOF THE FUNNEL? customer is not aware customer has a they have a problem, or problem and is that your product looking for a solution category exists GENERATE GET FOUND AWARENESS
- 26. WHAT IS THEMIDDLE OF THE FUNNEL? QUALIFY MQL (MARKETING QUALIFIED LEAD) NURTURE
- 27. WHAT IS THEMIDDLE OF THE FUNNEL? QUALIFY MQL (MARKETING QUALIFIED LEAD) NURTURE • Blog • eMail Campaigns • Webinars Wait for a Trigger • Free Trials • Newsletters Or try to create a Trigger • etc.
- 28. THE BUYER CONSIDERATION ADDRESS THEIR QUESTIONS & CONCERNS • Will this work for my situaRon? • Is it the best product in the market? • Is it a safe choice? (Who else is using it?) • Will I get a return on my investment? • Is it scalable, secure? • Is it easy to implement? • Will I get good support? • Etc.
- 29. LEAD NURTURING • Higher value if they are TARGETED directly to the interests of the reader • This means personalizaRon • Requires LEAD SEGMENTATION
- 30. LEAD SEGMENTATION What do we know about them? What do their acRons tell us? Buyer Behaviors APributes
- 31. EXAMPLE SEGMENTS Role in Purchasing Customer Size Technical, Business buyer Enterprise, SMB, VSB Customer or Reseller Ver3cal Financial, Pharma, etc. Areas of interest SEO, Social, MoFU, etc. Stage in Sales Cycle Pre-‐trial, in-‐trial, Lead Source post-‐trial, purchased Social Media Webinar, SEO keyword, etc.
- 32. MEASURE "IFYOU CAN NOT MEASURE IT, YOU CAN NOT IMPROVE IT." - LORD KELVIN
- 33. WHAT TO MEASURE FOR EACH STEP / ACTION: NO OF ACTIONS % CONVERSION RATE TIME TIME
- 34. THE KEY METRICS CAMPAIGNS TO DRIVE TRAFFIC VISITORS OVERALL CONVERSION CONVERSION % % TRIALS CONVERSION % CLOSED DEALS
- 35. NOT ALL LEAD SOURCES ARE EQUAL Google Ad Word Funnel FaceBook Ad Funnel Visitors Visitors 5% 2% Trial Trial 10% 20% $5,000 Customer $8,000 Customer
- 36. Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects BUT EVEN IF YOU ARE MICROSOFT, CISCO, ORACLE, OR GOOGLE YOUR FUNNEL WILL HAVE BLOCKAGE POINTS
- 37. 3 IMPROVE
- 38. IN DIAGNOSING MANYFUNNEL BLOCKAGE POINTS, I HAVE FOUND THAT THERE IS A CLEAR PATTERN…
- 39. YOU ARE HOPINGYOUR CUSTOMERS WILL DO SOMETHING THAT THEY ARE NOT MOTIVATED TO DO
- 40. IN OTHER WORDS… YOUDESIGNED YOUR FUNNEL THE WAY YOU HOPED IT WOULD WORK… BUT YOU MAY NOT HAVE THOUGHT ENOUGH ABOUT THE CUSTOMER’S POINT OF VIEW
- 41. JBOSS EXAMPLE PUT AREGISTRATION FORM ON THEIR WEB SITE BEFORE A FREE DOWNLOAD IMPACT CUT THE DOWNLOAD RATE BY MORE THAN 10X
- 42. GET INSIDE YOUR CUSTOMER’SHEAD FRICTION & CONCERNS
- 43. UNDERSTAND WHAT MOTIVATES THEM FRICTION & CONCERNS MOTIVATIONS
- 44. JBOSS EXAMPLE • Making $27,000 a month selling documentaRon • Solu3on: • Give away documentaRon to get their email address
- 45. EXAMPLE: DRIVING TRAFFIC TO YOUR WEB SITE GETTING FOUND Not going to find your site unless: friction & - On top page of Google concerns search results - Recommended by a trusted source - Referred to in social media or blogosphere
- 48. LESSONS FROM WEBSITE GRADER • Free tools drive viral spread • Low customer work required • High value delivered • Score leverages competitive urge, and acts as a trigger • Builds trust through clear demonstration of expertise
- 49. using engineering formarketing
- 50. USING DATA TODRIVE WEB TRAFFIC SYSOMOS: SOCIAL MEDIA MONITORING LEVERAGED THEIR DATABASE TO CREATE BLOG POSTS WITH DATA ON TOPICS OF CURRENT INTEREST: • IRAN ELECTION RIOTS • TWITTER’S GROWTH • FACEBOOK USAGE
- 52. LED TO: SYSOMOS ARTICLES IN ECONOMIST, NY TIMES WEB TRAFFIC TO READ THE FULL REPORT LEADS – IMPRESSED BY THE CAPABILITIES OF THE SOFTWARE
- 53. First Contact Sell Build Build First Contact Sell RelaRonship Trust
- 54. OFTEN NECESSARY TO FIND TOPICS THAT ARE NOT RELATED TO THE SALE Build Build RelaRonship Trust First Contact Sell
- 55. SELLING IS 10X EASIER… ONCE YOU HAVE ESTABLISHED TRUST
- 56. THE KEYS TOSUCCESS THE BUYER GET INSIDE YOUR BUYER’S MIND
- 57.
- 58. For More informa3on n Visit my blog at www.forEntrepreneurs.com