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Copyright © 2008 Olsen Solutions LLC
Designing & OptimizingDesigning & Optimizingthe DNA of a Killer Appthe DNA of a Killer AppDan Olsen, CEO & Founder, YourVersionDan Olsen, CEO & Founder, YourVersionStartonomics Startonomics ∙∙ San Francisco San Francisco ∙∙ Oct 2, 2008 Oct 2, 2008
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Building the DNA of a Killer App with Building the DNA of a Killer App with Metrics and OptimizationMetrics and Optimization
How to integrate metrics & optimizationHow to integrate metrics & optimization
Using metrics to optimize value creationUsing metrics to optimize value creationBusiness ValueBusiness Value
Customer ValueCustomer Value
UI DesignUI Design
Illustrate with real world examplesIllustrate with real world examples
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Adding Metrics and Optimization to your Product Process
PlanPlan
DesignDesign
DevelopDevelop
BusinessObjectives
ProductObjectives
Prioritized Feature List
Scoping
Requirements & Design
Code Test Launch
Site Level
Feature Level
OptimizeOptimize Metrics & User Feedback
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Optimization through Iteration:Optimization through Iteration:Continuous ImprovementContinuous Improvement
Measurethe metric
Analyzethe metric
Identify top opportunitiesto improve
Design & develop the enhancement
Launch theenhancement
Learning
Gaining knowledge:
• Market
• Customer
• Domain
• Usability
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OptimizingOptimizingBusiness Value Creation Business Value Creation
with Metricswith Metrics
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Approaching Business as an Approaching Business as an Optimization ExerciseOptimization Exercise
Given reality as it exists today,Given reality as it exists today,
optimize our business resultsoptimize our business results
subject to our resource constraints.subject to our resource constraints.
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Profit = Profit = RevenueRevenue ‐‐ CostCost
Unique VisitorsUnique Visitors x x Ad Revenue per VisitorAd Revenue per Visitor
Impressions/VisitorImpressions/Visitor x Effective CPM / 1000x Effective CPM / 1000
Visits/Visitor x Pageviews/Visit x Impressions/PVVisits/Visitor x Pageviews/Visit x Impressions/PV
New VisitorsNew Visitors + Returning Visitors+ Returning Visitors
Invited VisitorsInvited Visitors + Uninvited Visitors+ Uninvited Visitors
# of Users Sending Invites x Invites Sent/User x Invite Clic# of Users Sending Invites x Invites Sent/User x Invite Clickk‐‐through Ratethrough Rate
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Define the Equation of your BusinessDefine the Equation of your Business““Peeling the OnionPeeling the Onion””
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How to Track Your MetricsHow to Track Your Metrics
Track each metric as daily time seriesTrack each metric as daily time series
Create ratios from primary metrics: X / YCreate ratios from primary metrics: X / YExample: How good is your registration page?Example: How good is your registration page?Okay:Okay: # of registered users per day# of registered users per dayBetter:Better: registration conversion rate =registration conversion rate =
# registered users / # uniques to reg page# registered users / # uniques to reg page
DateDateUnique Unique VisitorsVisitors
Page Page viewsviews
Ad Ad RevenueRevenue
New User New User SignSign‐‐upsups ……
4/24/084/24/08 10,10010,100 29,60029,600 2525 490490
4/27/084/27/08 10,50010,500 27,10027,100 2424 480480
……
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Sample Signup Page Yield DataSample Signup Page Yield Data
Daily Signup Page Yield vs. TimeNew Registered Users divided by Unique Visitors to Signup Page
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1/31 2/14 2/28 3/14 3/28 4/11 4/25 5/9 5/23 6/6 6/20 7/4 7/18 8/1 8/15 8/29 9/12 9/26 10/10
Dai
ly S
ignu
p Pa
ge Y
ield
Changedmessaging
Added questionsto signup page
Started requiringregistration
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Using Metrics to Optimize the Using Metrics to Optimize the Equation of your BusinessEquation of your Business
What are the metrics for your business?What are the metrics for your business?Where is current value for each metric? Where is current value for each metric? How many resources to How many resources to ““movemove”” each metric?each metric?
DeveloperDeveloper‐‐hours, time, moneyhours, time, moneyWhich metrics have highest ROI opportunities?Which metrics have highest ROI opportunities?
Return
Return
InvestmentInvestment
Return
Return
InvestmentInvestmentRe
turn
Return
InvestmentInvestment
Metric AMetric AGood ROIGood ROI
Metric BMetric BBad ROIBad ROI
Metric CMetric CGreat ROIGreat ROI
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• Which metric has highest ROI opportunity?
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Case Study:Case Study:Optimizing Viral Loop MetricsOptimizing Viral Loop Metrics
ActiveUsers
Prospective Users
Invite Click
Succeed
Inviteclick-through rate
Conversion rate
Don’t Click
Fail
Invites per sender
% of users sending invites
• Multiplied together, these metrics determine your viral ratio
Users
% of users who are active
= 15% = 2.3
= 85%
Registration Process
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Maximum Upside Potential of a MetricMaximum Upside Potential of a Metric
0
100%
Registration conversion rate
0
100%
% of users sending invitations
0
?
Avg # of invites sent per sender
2.3
85%
15%
Max possible improvement
0.15 / 0.85 = 18% 0.85 / 0.15 = 570% ? / 2.3 = ?%
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Doubling Number of Invitations Sent per Sender by Doubling Number of Invitations Sent per Sender by Adding Address Book ImporterAdding Address Book Importer
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OptimizingOptimizingCustomer Value Creation Customer Value Creation
with Metricswith Metrics
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The Fuzzy Math of Customer ValueThe Fuzzy Math of Customer Value
You create customer value with a product thatYou create customer value with a product thatSatisfies customersSatisfies customers’’ needsneedsIs easy to useIs easy to useHas a good priceHas a good priceIs better than other alternativesIs better than other alternatives
Customer value = customer satisfactionCustomer value = customer satisfactionNot fuzzy: # of users and frequency of useNot fuzzy: # of users and frequency of useUnderstanding user needs and satisfactionUnderstanding user needs and satisfaction
Quantitative: site analytics, usage metrics, surveysQuantitative: site analytics, usage metrics, surveysQualitative: support emails, usability sessions (best)Qualitative: support emails, usability sessions (best)
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What is Your Value Proposition?What is Your Value Proposition?
Which user benefits are most important?Which user benefits are most important?How well does your product deliver?How well does your product deliver?
Benefit 1
ImportanceImportanceto Userto User
Current UserCurrent UserSatisfactionSatisfaction
Benefit 2
User BenefitUser BenefitUpsideUpside
PotentialPotential
Benefit 4
Benefit 5
Benefit 6
High
High
Med
Low
Low
Low High – +
Doesn’t matter
Benefit 3 Lowopportunity
opportunity
?
?
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Analyzing Product Ideas by ROIAnalyzing Product Ideas by ROI
Investment (developer-weeks)
Ret
urn
(Val
ue C
reat
ed)
Idea C
Idea B
Idea D
Idea A
Idea F
1
1
2 3 4
2
3
4?
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Prioritizing Product Ideas by ROIPrioritizing Product Ideas by ROI
Investment (developer-weeks)
Ret
urn
(Val
ue C
reat
ed)
Idea B
Idea A
Idea C
1
1
2 3 4
2345678
5
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The UI Design IcebergThe UI Design Iceberg
VisualDesign
InteractionDesign
InformationArchitecture
ConceptualDesign
Recommended reading: Jesse James Garrett’s“Elements of User Experience” chart, free at www.jjg.net
What most people seeand react to
What good PMs and Designers think about
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UI questions are never yes/no! (not binary)UI questions are never yes/no! (not binary)Should ask: Should ask: ““What percentage of users What percentage of users ……??””UI changes impact your metricsUI changes impact your metrics
Impact can be positive, negative, small, largeImpact can be positive, negative, small, largeSeek highSeek high‐‐ROI UI changesROI UI changes
Approaching UI Design AnalyticallyApproaching UI Design Analytically
Typical UI design question:Typical UI design question:““When using web pages, do users scroll down?When using web pages, do users scroll down?””
‐‐ YesYes‐‐ NoNo
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Put Key Conversion Actions Above The FoldPut Key Conversion Actions Above The Fold
Landing Page ALanding Page A Landing Page BLanding Page B
Key conversion action is above the fold
Key conversion action is below the fold
The Fold
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The Fold IsnThe Fold Isn’’t Binary Eithert Binary Either
600 px
768 px
1024 px
Data courtesy of ClickTaleData courtesy of ClickTaleFree trial at www.clicktale.comFree trial at www.clicktale.com
% of U
sers The chrome steals
about 170 pixels
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Case Study: Account Signup Process RedesignCase Study: Account Signup Process Redesign
100%
62.3%58.8%
50.9%
34.4% 32.7%
0%
20%
40%
60%
80%
100%
% of U
sers
% of U
sers
Sign in /Sign in /RegistrationRegistration
Account Account TypeType
Cash vs.Cash vs.MarginMargin
5 Partner5 PartnerPagesPages
3 Partner3 PartnerPagesPages
Biggest drop
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OpenAccount
Sign in
Account Selection
Register
56%
44%
Forget Password
Registration Process
45% drop off(20% of total)
36% overall drop off for this step
70%(32% of Total)
17% drop off (10% of total)
20% drop off(6% of total)
30%(14% of Total)
80%(26% of Total)
55%(24% of Total)
64%of Total
Analysis of Sign In/Registration FlowAnalysis of Sign In/Registration Flow
Change Password
83%(46% of Total)
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Abandonment Rate (7 Day Moving Average)
0%
10%
20%
30%
40%
50%
60%
70%
80%
10/7
/02
10/1
4/02
10/2
1/02
10/2
8/02
11/4
/02
11/1
1/02
11/1
8/02
11/2
5/02
12/2
/02
12/9
/02
12/1
6/02
12/2
3/02
12/3
0/02
1/6/
03
1/13
/03
1/20
/03
Aba
ndon
men
t Rat
e (7
Day
Mov
ing
Ave
rage
)
Steps 1-2
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Redesigned User Flow Improved Redesigned User Flow Improved Registration Conversion RateRegistration Conversion Rate
37% improvement in conversion rate
ReleasedNew Design
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Summary: Building the DNA of a Killer AppSummary: Building the DNA of a Killer App
Define what success meansDefine what success meansCustomer value propositionCustomer value proposition
Equation of your businessEquation of your business
Instrument your site and track key metricsInstrument your site and track key metrics
Identify opportunities and prioritize by ROIIdentify opportunities and prioritize by ROI
Launch, learn, and iterateLaunch, learn, and iterate
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[email protected] @yourversion.com
Questions?Questions?
www.yourversion.comwww.yourversion.com