Marketing and The Sales PipelineMarketing and The Sales PipelineSlide 1E145 Entrepreneurship Autumn 2008Total Available Market, Served Available Market, Target MarketTotalAvailableMarketServedTAM = how big is the universeAvailableMarketTarget MarketSAM = how many can I reach with my sales channelMarketyyk(f )Target Market (for a startup) = who will be the most likely buyersSlide 2E145 Entrepreneurship Autumn 20082SegmentationShow Me the MoneyTotalAvailableMarketServed• Geographic•DemographicAvailableMarketTarget Marketgp• Psychographic variables• Behavioral variablesCh lMarket•Channel•etc…Slide 3E145 Entrepreneurship Autumn 20083Customers, Marketing and the Sales FunnelCustomers, Marketing and the Sales Funnel• Positioning mattersDemandCreationAcquisitionTotalAvailableMarketServedAvailableMarketPayingCustomers$Target MarketMarket$Slide 4E145 Entrepreneurship Autumn 2008Positioning Happens BeforeDdCiDemand CreationDemandCtiCreationSlide 5E145 Entrepreneurship Autumn 2008Demand Creation Feeds the Sales FunnelDemand Creation Feeds the Sales FunnelDemandCreationPayingAcquisitionPayingCustomers$Slide 6E145 Entrepreneurship Autumn 2008Demand CreationElEiSfExample –Enterprise SoftwareDemand• Print Advertising• Direct MailCreation• Viral marketing• E‐mail marketingg• Blogs• Communities• SEM/SEOSlide 7E145 Entrepreneurship Autumn 2008Demand CreationElWbVi l WldExample–Web Virtual WorldShi ki (S )Demand•Search Engine Marketing (SEM)• Search Engine Optimization (SEO)Creation(SEO)• Viral marketing•Email marketing•E‐mail marketing• Affiliate Marketing•Bannering•Bannering• CommunitiesSlide 8E145 Entrepreneurship Autumn 2008Demand Creation onthe Web is DifferentDemand Creation on the Web is Different• Search engine marketing (SEM) i.e. keyword advertising, paid search, etc.– your ad in a search engine. Paid for on a per‐click‐basis (PPC ‐ pay per click)• Search engine optimization (SEO)–free traffic by optimizing your website for readability by the search enginesy pgy y y g• Viral marketing– Spreads your message by your users/customer. i.e. Hotmail email tag line•Affiliate management•Affiliate management– Partners that promote your product or service on their web own page. They earn money by selling your product. •Banneringie skyscrapers superbanners content ads flash layers etc•Banneringi.e. skyscrapers, superbanners, content ads, flash layers, etc.– you buy media space on other websites on a PPC (pay per click) or CPM (cost per million.) Your banners displayed in predefined spaces. Slide 9E145 Entrepreneurship Autumn 2008Demand Creation on the WebYou Pay For These(SEM)(SEM)These are Free(SEO)(S O)Slide 10E145 Entrepreneurship Autumn 2008Customer Acquisition CostDemandCreationTo get one customer hereHow much do you have to spend herePayingAcquisitionPayingCustomers$Slide 11E145 Entrepreneurship Autumn 2008The Sales FunnelThe Sales FunnelAiiiAcquisitionPayingPayingCustomers$Slide 12E145 Entrepreneurship Autumn 2008Distribution ChannelsHow Does the Product Reach the Customer?AcquisitionPayingPayingCustomers$Distrib. ChannelSlide 13E145 Entrepreneurship Autumn 2008Distribution ChannelPick OneSystem IntegratorsOEMsY Your Direct Sales ForceValue-Added Your CompanyCustomersValueAdded Resellers (VARs)DealersDistributorsSlide 14E145 Entrepreneurship Autumn 2008Retail/Mass Merchants/OnlineThe Sales FunnelEnterprise SoftwareLdQualified LeadLeadsPayingFirst Sales CallDemonstrationFeasibility PayingCustomers$ProposalPurchase OrderSlide 15E145 Entrepreneurship Autumn 2008The Sales FunnelWeb FunnelAiiiRegisteredAcquisitionPayingLog inFirst Conversation5 Conversations PayingCustomers$Paid OnceSubscriptionRevenueActivationRetentionSlide 16E145 Entrepreneurship Autumn 2008AARRR: Web Marketing MetricsSEOCampaigns, SEOSEMApps & WidgetsAffiliatesEmailPRBiz DevContestsDirect, Tel, TVSocial NetworksBlogsViral LoopsViral LoopsQUISITIONACQUISITIONWidgetsTVDomainsEmails & AlertsEmails & widgetsEmails & widgetsBlogs, RSS, News FeedsAffiliates, ContestsAffiliates, ContestsBiz DevAds, Lead Gen, Subscriptions, ECommerceSystem Events & Time‐based FeaturesSlide 17E145 Entrepreneurship Autumn 2008Website.comAnalyze The Funnel Over Time100% 52.7%80%90%Registered but didn’t login 43.3% 48.5% 48.2% 47.3% 46.4% 42.5% 49.2% 44.7% 42.2% 43.7% 43.8% 47.6%70%80%Registered but didn't 15.4% 13.8% 14.9% 16.6% 16.4% 16.1% 16.8% 15.5% 15.7% 20.0% 15.7% 14.2%50%60%Login but no conversation 19.1% 16.9% 16.6% 16.8% 17.5% 19.3% 15.1% 13.2% 20.3% 19.5% 19.5% 17.0% 16.3% 12.6%30%40%Logged in but didn't have Had one convo but not fiveHad 1 conversation but not 5 20.7% 19.5% 19.1% 18.1% 18.4% 20.9% 19.3% 21.2% 19.7% 20.0% 19.7% 16.7% 20.9%10%20%Had five convos but didn't payHad 1 conversation but not 5Had 5 conversations but didn’t paySlide 18E145 Entrepreneurship Autumn 200818 1.5% 1.2% 1.1% 1.3% 1.2% 0.9% 1.0% 1.2% 1.4% 1.0% 1.0% 1.3% 0.6%0%Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-0Had 5 conversations but didn’t payPaidCohort Analysisof the FunnelCohort Analysisof the Funnel45%50%Retention of activeusers whoregistered 30-60days agoRetention of active35%40%users whoregistered 60-90days agoRetention of activeusers whoregistered 90-12025%30%days agoThis plot measures retention by calculating