Growth Hacker’s Digest – Edition 32
For this week, we'll look into some business models we don't see that often - subscription boxes and one-time SaaS fees. The cases I'll share will surprise you because they're not from venture backed companies (typical for subscription boxes) nor are they from lifestyle businesses (typical for one-time SaaS fees).
Instead, they're being used by fast-growing bootstrapped companies. More after the jump.
Beyond these two, here's what we have for you:
- What are Heatmaps good for? (Apart from looking cool)
- How to build a basic mobile growth model
Blog Posts of Note:
Advice from a serial subscription box entrepreneur
by Jameson Morris
Similar to a SaaS B2B business, an important factor for success in subscription boxes include strong attention to churn & retention.
Different to a SaaS B2B business, he's also making a big effort on improving product and customer experience.
More about teaser processes and why not to do venture capital in the link.
How did the team at Know your Company sustain a B2B business over 2 years with just a one-time fee?
The answer lies in the realities behind "customer lifetime duration" and the psychology behind "lifetime access fees".
Customer lifecycles of most companies don't go beyond 2 years. If you have the ability to charge for lifetime access for more than the equivalent value of a 24 month subscription, you can justify the math of a one-time fee.
This was the case for Know your Company, who had an average customer lifetime value of $4600 for a duration of 19 months. Alternatively, the benchmark monthly rates would have been $5 / employee per month. If they wanted the recurring fee model to match that of Know your Company, they would have needed 30 months to get there.
What Are Heat Maps Good For (Besides Looking Cool)?
by Alex Birkett
You've probably heard about heat maps for conversion rate optimization. But what are the next actions after gathering insights to generate a heat map? Here they are:
1. Movement Maps / Algorithmic Maps: Content layouts and color contrasts
2. Click maps: Add links to to 'empty' areas
3. Scroll maps: Content prioritization
How To Build A Basic Mobile Growth Model
By William Gill
When building a growth model, the basic principle that you need to keep in mind is to deconstruct an output into inputs. For example:
- Level 1: Increase Traffic
- Level 2: [Channel-based deconstruction] Facebook, Google, Twitter, Pinterest
- Level 3.A: [Parts of a Facebook Campaign] Audience Structure, Ad Design, Ad Copy, Bidding Strategy
As you can see, we started with an output, then we transitioned to the channels, or the ways that we can get to the output, then to the actionable inputs themselves.
Once you arrive at these actionable inputs, you then cycle through them to discover the optimal audience structure, ad design, ad copy, and bidding strategy until you get to the point where it's helping you achieve your traffic goals.
Note that models are not just about numbers -- it's all about actions. So don't hard code 10% anymore in your model 😉
Have a great weekend!