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lean Analytics, (D) Media Sites, Analytics Framework, What Business you…
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- Problem: Have you identified real problems people know they have?
- Customer segments: Do you know your target markets? Do you know
how to target messages to them as distinct groups?
- Unique value proposition: Have you found a clear, distinctive,
memorable way to explain why you’re better or different?
- Solution: Can you solve the problems in the right way?
- Channels: How will you get your product or service to your customers,
and their money back to you?
- Revenue streams: Where will the money come from? Will it be one-time or recurring? The result of a direct transaction (e.g., buying a meal) or something indirect (magazine subscriptions)?
- Cost structure: What are the direct, variable, and indirect costs you’ll
have to pay for when you run the business?
- Metrics: Do you know what numbers to track to understand if you’re
making progress?
- Unfair advantage: What is the “force multiplier” that will make your
efforts have greater impact than your competitors?
One Metric that Matters
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Could you draw a line in the sand to measure results? If not, that’s OK.
First Focus one Metric that matters, than move to second metric
Perhaps you’ve optimized the number of enrollments in your gym, and you’ve done all you can to maximize revenues—but now you need to focus on cost per customer so you turn a profit.
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Perhaps you have the foot traffic in your coffee shop you’ve always wanted—but now you need to get people to buy several coffees rather than just stealing your Wi-Fi for hours.
(D) Media Sites
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Traffic Analysis
- Unique visitors per month
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- Time on site per visit (m)
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- Monthly page views (inventory)
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Metrics to care
- Audience and churn - How many people visit the site and how loyal they are.
- Ad inventory - The number of impressions that can be monetized.
- Ad rates - Sometimes measured in cost per engagement—essentially how much
a site can make from those impressions based on the content it covers
and the people who visit.
- Click-through rates - How many of the impressions actually turn into money.
- Content/advertising balance - The balance of ad inventory rates and content that maximizes overall
performance.
Sponsorship Revenue
- Monthly sponsorship rates
- Number of sponsored banners
- Total sponsorship contribution
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Key Takeaways
- For media sites, ad revenue is everything—but advertising may include
displays, pay-per-view, pay-per-click, and affiliate models, so tracking
revenues is complex.
- Media sites need inventory (in the form of visitor eyeballs) and
desirability, which comes from content that attracts a demographic
advertisers want.
- It’s hard to strike a balance between having good content and enough
ads to pay the bills.
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- What Business you are in ?
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Business Model
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Ad-Funded
Google, Facebook, Snapchat
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(b) SaaS Model
Key Takeways -
- While freemium gets a lot of visibility, it’s actually a sales tactic, and
one you need to use carefully.
- In SaaS, churn is everything. If you can build a group of loyal users
faster than they erode, you’ll thrive.
- You need to measure user engagement long before the users become
customers, and measure customer activity long before they vanish, to
stay ahead of the game.
- Many people equate SaaS models with subscription, but you can
monetize on-demand software in many other ways, sometimes to great
effect.
Measuring Engagement
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Usage Patterns to watch
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- If people log in three times per week,
but what are they actually doing inside your application?
- What if they’re only spending a few minutes each time? Is that good or bad?
- Are there specific features they’re using versus others?
- Is there one feature that they always use, and are there others they never touch?
- Did they return of their own accord, or in response to an email?
Analyze data in 2 ways
- To find ways you might improve things, segment users who do what you want from those who don’t, and identify ways in which they’re different. Do the engaged users all live in the same city? Do all users who eventually become loyal contributors learn about you from one social network? Are the users who successfully invite friends all under 30 years old? If you find a concentration of desirable behavior in one segment, you can then target it.
- To decide whether a change worked, test the change on a subset of your users and compare that subset’s results to others. If you put in a new reporting feature, reveal it to half of your users, and see if more of them stick around for several months. If you can’t test features in this way without fallout—the customers who didn’t get the new feature might get angry—then at the very least, compare the cohort of users who joined after the feature was added to those who came before.
Churn
Definition
In a freemium or free-trial business model, you have both users (not paid) and customers (paid), and you should track churn for both groups separately.
Unpaid users “churn” by cancelling their accounts or simply not coming back; paid users churn by cancelling their accounts, stopping their payments, or reverting to an unpaid version.
the percentage of people who abandon your service over time. This can be measured weekly, monthly, quarterly, etc.,
Analyze Churn in 2 ways
- To measure churn by cohort, so you’re comparing new to churned users based on when they first became users.
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Complexities
Proimotional Approaches
- Freemium Model - to convince people to use the service, and then make money when those users exceed some kind of cap.
- Free Trial - which converts to a paid
subscription if the customer doesn’t explicitly cancel after a certain time.
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Pricing Models
- Monthly/Yearly subscription
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Companies
Only 1%
of users convert into paid customers,*
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(F) Marketplaces
Web Analytics
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E) Sales, satisfaction, and revenue (Monthly)
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- Click-through to listings
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- Percent satisfied transactions
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F) Quality of Listings
- Searches per Buyer per day
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- Average search result count
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Metrics to Measure
- Buyer and seller growth - The rate at which you’re adding new buyers and sellers, as measured by return visitors. <-> (Demand always beat Supply)
- Inventory growth - The rate at which sellers are adding inventory—such as new listings — as well as completeness of those listings.
- Search effectiveness - What buyers are searching for, and whether it matches the inventory you’re building. Note - Track no. of Searches with No Result.
- Conversion funnels - The conversion rates for items sold, and any segmentation that reveals what helps sell items—such as the professional photographs of a property mentioned in the Airbnb case study in Chapter 1.
- Ratings and signs of fraud - The ratings for buyers and sellers, signs of fraud, and tone of the
comments.
- Pricing metrics - If you have a bidding method in place (as eBay does), then you care whether sellers are setting prices too high or leaving money on the table.
Key Takeaways
- Two-sided markets come in all shapes and sizes.
- Early on, the big challenge is solving the “chicken and egg” problem
of finding enough buyers and sellers. It’s usually good to focus on the
people who have money to spend first.
- Since sellers are inventory, you need to track the growth of that
inventory and how well it fits what buyers are looking for.
- While many marketplaces take a percentage of transactions, you may
be able to make money in other ways, by helping sellers promote their
products or charging a listing fee.
Focus on One
- Creating Supply/Inventory/Listing - Partners
- Creating Demand - Clients
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(a) E-Commerce Model
Key Takeways
- It’s vital to know if you’re focused on loyalty or acquisition. This drives
your whole marketing strategy and many of the features you build.
- Searches, both off- and on-site, are an increasingly common way of
finding something for purchase.
- While conversion rates, repeat purchases, and transaction sizes are important, the ultimate metric is the product of the three of them: revenue per customer.
- Don’t overlook real-world considerations like shipping, warehouse
logistics, and inventory.
Modes of E-Commerce
If less than 40% of last year’s buyers will buy this year, then the
focus of the business is on new customer acquisition.
If 40–60% of last year’s buyers will buy this year, then the company will grow with a mix of new customers and returning customers.
If 60% or more of last year’s buyers will buy something this year, the company needs to focus on loyalty, encouraging loyal clients to buy more frequently.
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