Build The Right Funnel and Grow Your Business Fast

Dan McGaw, Director of Marketing at KISSmetrics

Build The Right Funnel and Grow Your Business Fast April 2014

@DanielMcGaw #KISSwebinar

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1 What is activation?

2 4 levers for industry domination

3 Common pitfalls of testing

Table of Contents

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What is Activation?

1

Your SaaS funnel

What is Activation?

Not only do people need to create an account, they need to start using your product.

Are people using your product?

No value = No sale

How to define activation

Activation is the critical step people need to take in order to get value from your product

Facebook Activation = 10+ Friends

What is Activation?

Evernote Activation = First note wri!en

What is Activation?

Instagram Activation = Filter used on an image

What is Activation?

Basecamp Activation = Project created

What is Activation?

Make sure to track activation

It’s the most important part of your funnel and everyone forgets it.

Funnel Levers

2

What’s a lever?

A change to the funnel that helps you maximize results.

Lever #1: Free Trials

People love free

More people will try your product

Trial Funnel

Funnel Levers

Visited Site UpgradedTrial Sign

UpActivated

Basecamp Free trial

Funnels Levers

On-ramp program is critical

You have a limited number of days to make the sale. Don’t waste them.

What’s your on-ramp program?

The new user experience (NUX) should be completely different than your regular program.

Shopify NUX

Funnel Levers

14, 30, or 45 day trial?

You need to find out what works best for your company

Funnel Levers

Replacing the free trial

Try replacing your free trial with a 30-day money back guarantee.

Lever #2: Freemium

Again people love free

Can be hard to convert free into paid

Looking for user growth?

Freemium is where you want to be.

What do you limit?

There’s a balance between offering enough so people sign up but not offering too much so they never upgrade.

1 Dropbox = 2 GB of Storage

2 Evernote = 60 MB of Uploads

3 MailChimp = 2,000 Email Subscribers

Common Freemium Limits

MailChimp Freemium

Funnel Levers

Freemium users take forever to upgrade

Very difficult to track changing behavior over time with a long-term funnel.

Cohort reports help a lot with freemium

Funnel Levers

LOG IN WITH GOOGLE

Start Your Free KISSmetrics Trial

Lever #3 Up-front Credit Cards?

Funnel Levers

When do you collect credit card info?

At account creation or at upgrade?

?

Credit cards up front

Fewer people will create an account but a LOT more will upgrade (especially if the upgrade is opt-out).

Credit cards at upgrade

Much easier to get people to create an account, much harder to get them to upgrade.

AWeber $1 Trial

Funnel Levers

Maximizing users or revenue?

• If users, try no credit card • If revenue, try up-front credit cards.

Lever #4 Monthly or Annual Billing

Funnel Levers

Is the focus on users or revenue?

Monthly gets more users, annual gets more revenue.

CrazyEgg used to be monthly

Funnel Levers

KISSmetrics offers both but with a discount for annual

Funnel Levers

Your funnel levers

1 Free Trials

2 Freemium

3 Credit Cards Up-front

4 Monthly or Annual Billing

Test different levers to achieve the highest growth

Funnel Levers

Common Pitfalls

3

What Should You Focus on First?

Look for bo!lenecks in your funnel

What step is a serious roadblock for people?

Very few people go from Activation to Upgrade

Common Pitfalls

Use levers to fix bo!lenecks

Common Pitfalls

Are You Only Testing the

Funnel?

Variation B performs the best in this funnel

Common Pitfalls

Variation A gives the most revenue

Common Pitfalls

Should We Test Randomly?

Why did you get your results?

If you just start testing without first understanding user behavior, you won’t be learning.

Do you have qualitative data?

Once we understand our users, then we can

work the levers for the best fit.

Where do we get qualitative data?

Talk to your customers.

Questions? We will do our best to answer

THANK YOU

Dan McGaw @danielmcgaw