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

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

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
      • Sticky 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