Tuning the Engine of Growth

Tuning the Engine of growth

• What is an engine of growth? It’s A metaphor and a financial model
• Approach
  1. Identify key stages of relationship with customer
  2. Measure customers at each stage
  3. Analyze impact on financial model
  4. Tune the engine

Key stages

• Key stages…You don’t want all of these:
  • Visit: users come to the site from various channels
  • Repeat: come back to the site because they liked it.
  • Register: request a log in or register to become a user
  • Activate: actually activate their account (respond to an email)
  • Retain: come back at lease X times and use the site repeatedly
  • Refer: they refer their friends within X days
  • Pay: Actually send you money within X days
  • Abandon: Don’t log in aagain after X days
  • Cancel: Actually cancel their account
• Measure
  • Which stage can you actually measure in your product or service?
  • Be very precise about the ones you decide to measure
  • You can’t/shouldn’t measure all of them
  • The ones that matter to you are the ones that tie in with your engine of growth
• Model
  • How do you plan to make money or achieve your objectives?
  • Remember the different types of engines of growth
    • Stickey Engine of Growth (subscription)
    • Viral (users invite other users)
    • Paid (simple purchase, one shot)
    • Accessory (in product purchases)
• Tune: Make changes, see the impact
  • Now that you know what you’re optimizing for
  • And you have a wy to see before and after
  • You can experiment and tune your engine

Let’s work through a detailed example!

• Download and take a look at this simple financial model spreadsheet.