Product Marketing Metrics for Pirates

Product Marketing Metrics for Pirates

I recently published a post on the customer development and lean startup presentation that Steve Blank gave this year at South by Southwest. In Blank’s presentation, he referenced a discussion Dave McClure often gives to entrepreneurs and startups entitled, Product Marketing Metrics for Pirates (AAARR!). McClure is a venture capitalist and founding partner at 500 Startups, an Internet-focused incubation program and seed fund based in Mountain View, CA. Below is a summary of McClure’s discussion.

Customer Lifecycle

  • Acquisition– Users come to the site from various channels (e.g., blogs, SEO, etc.).  Sample metrics: X number of clicks, Y number of page views and Z time on site.
  • Activation– Users have a “happy” first experience.  Sample metrics: enter profile data, sign up for newsletter and watch product demonstration. A/B test and iterate often to determine the best features for the site.
  • Attention– Users come back to the site multiple times.  Sample metrics: email click-through(s) and repeat visitors.  Use automated customer lifecycle emails to build awareness.
  • Referral– Users like the product enough to refer others to it.  Sample metrics: number of referrals and activations.  Do not do viral marketing until the product is ready.
  • Revenue– Users engage in a monetization activity (purchase, subscription, etc.).  Sample metrics: break-even revenue and minimum revenue.

Executive – The goal of the CEO/founder:

  • Create a customer lifecycle guess (hypothesis) and continually refine it.
  • Delegate measurements/metrics.
  • Focus on conversion improvement.
  • Focus on less, not more (only 5-10 measurements/metrics).
  • Measure and iterate.

Marketing- The goal of the marketing team:

  • Convert users into paying customers.
  • Know the best performing (converting) channels; high-volume channels and low-cost channels.
  • Know what channels, landing pages, messages, segments and visuals are being successful.
  • Measure lowest level of the funnel; not users hitting site at top, but users covering at bottom.
  • Test multiple channels and select them for low cost, high volume and high conversion.

Product- The goal of the product team:

  • Focus 80% on existing feature optimization.
  • Focus 20% on new feature development.
  • Make a guess (state a hypothesis) and do continuous A/B testing.
  • Measure conversion improvement.
  • Rinse and repeat.

Types of Measurement/Metrics

  • Comparative – A/B and multivariate testing.  Compare what users do in different scenarios.
  • Competitive – Competitive monitoring and tracking.  What is the competition doing?
  • Qualitative – Session monitoring and usability testing.  Watch what users do.
  • Quantitative – Traffic analysis and user engagement, including conversion.  What do users do?
  • The goal is to implement tools to obtain information and insight in each of the above categories.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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