Growth Hacker’s Digest – Edition 20
How was your labor day weekend? Spent mine playing around with sand dunes and jeeps 🙂 Check it out:
sand… lots of sand.
what good are sand dunes without jeeps and trucks to play them with? :p
In Growth Hacker Kit, here’s what we have for you:
– We’ll look into one piece of the eCommerce conversion puzzle by learning how to create “sticky” home pages that reduce bounce rates
As for the blog posts of note:
– We’ll discover what are the emerging distribution channels are for 2016
– How to convert Free Trial SaaS Users to Paid Users
– Why Misunderstanding Startup Metrics can Cost you your Business
– How to Calculate Profit correctly in the context Multi-Medium Paid Marketing Model
New at Growth Hacker Kit:
Now out for pre-orders! Let me know if you have any questions 🙂
This is the first of a series of blog posts around eCommerce Conversion I’m planning to share en route to the launch of this course.
Here, I share that conversion is not a number. Rather, it is a system of factors that need to work together to help you increase your sales.
In this article, I examine one piece of the puzzle: how to lower bounce rates.
Blog Posts of Note:
by Tradecraft Blog
Part of the culture around growth hacking is about discovering channels that are under-tapped. Under-tapped channels mean cheaper costs and differentiated offerings for your business. That said, some growth leaders in the industry share in this article what they think we should keep an eye on in the next few months.
From the looks of it, the theme here is that Snapchat, App Store Optimization (ASO), and Address Book Invites are the channels to watch.
Regarding how these channels fit in the AARRR funnel, ASO and the Address Book fit right into acquisition and Snapchat is for retention (via branding).
Address Book invites, either through SMS or Email, is permissionless thus it can drive immense growth once the user receives and loves the product value. I say it is permissionless because there’s no platform yet that blocks email contact imports and phone contact imports. Other channels, like Facebook Ads and On-site Retargeting, are “permission channels” as they require a prompt from the user by the act of entering an email address or by the act of a click on the ad.
As for ASO, there are three things I can advise you to help you win:
1. Rapid localization: you’ll need to get as many translations of your app as much as possible
2. Exclusivity: if you want to get featured by Apple, you must be exclusively available for Apple. Once you get featured, only then should you expand to other platforms.
3. Outreach: make sure that you email Apple folks to seek for feedback or better yet, discover which conferences they engage in and network with folks from apple.
Lastly, for Snapchat, you’ll need to realize that it’s best utilized as a branding and engagement tool to retain your users. Note that the content from Snapchat should not be your #1 retention driver (it should be the core feature of your product). Rather, it should be treated as a tool to build loyalty (and hence increase LTV) through branding.
by Annie Musgrove
After the initial SaaS lead generation, the next step is to get those folks from trial to payment. There are two principles that you need to keep in mind:
1. Reduce Time-to-Value as much as possible
2. Confirm Time-to-Value via 3-day Active User %
Time-to-Value just means the time spent before the user experiences the core value of the product. If you are Facebook, then the core product value is the newsfeed. If you are using Mailchimp, it’s the ease of creating an email newsletter.
To reduce Time-to-Value, you need to do 3 things:
1) Keep your app as simple as possible. Don’t structure your app like an ERP. When building features, it’s quality > quantity. This means that you should identify the core user flow then design against that.
2) Best-in-Class Onboarding. Not only should the software equip the user, but it should also guide the user on how to use it.
3) Documentation & Content Marketing. Documentation drives “how-to-use”. Content drives “why-to-use” and “what-to-use”.
by Mark Suster
Underestimated CAC and overestimated LTV jointly causes 70% of startup failures. Given that measuring CAC is far easier than LTV (because the inputs are controllable), I suggest keeping your costs as low as possible while focusing on reducing churn.
I would even suggest to assume 0 LTV at the start until your users extend beyond the free trial. Success is very hard to discover in SaaS until you are 2 years into the game.
If you need to know what SaaS metrics to aspire for, I suggest you look through this awesome SaaS benchmark spreadsheet.
by Jamie Quint
While you could get your overall CAC easily, determining where to attribute paid marketing spend is another ballgame.
Imagine this: you’ve spent money on AdWords, Facebook Ads, and Retargeting Banner Ads just to get 1 specific customer. How would you measure the cost per customer per advertising channel? You’ll need this to identify what channel is working for you. In his blog post, Jamie shares with us 2 simple attribution models and what his recommendation is.