Step 23: Show That “The Dogs Will Eat The Dog Food”

Outline Overview Example Metrics Workshop November 14, 2018

“Dogs will Eat the Dog Food” Chemist makes new dog food in lab Overview “Dogs will Eat the Dog Food” Chemist makes new dog food in lab Food is superior in quality and nutritional value Food is much cheaper than competitors Chemist gets millions to build factory Makes new food, sells, ships But.. Dogs don’t eat it Company fails.. November 14, 2018

“Dogs will Eat the Dog Food” Happens all the time! Overview “Dogs will Eat the Dog Food” Happens all the time! E.g., electronic medical records in the 1990s E.g., electric car in the 1990s November 14, 2018

Demonstrate that customers will pay for your MVBP Overview This step: Demonstrate that customers will pay for your MVBP Develop metrics that will indicate success / failure Conversions Adoption rate Value gained … Numbers don’t lie… November 14, 2018

Time to test your MVBP objectively- Overview Time to test your MVBP objectively- Whether end-user is using product and getting value Whether economic buyer is willing to pay Whether champion is pleased enough to continue advocacy November 14, 2018

Outline Overview Example Metrics Workshop November 14, 2018

Use Step 18: Map Sales Process to Acquire Customer as foundation Example Metrics Use Step 18: Map Sales Process to Acquire Customer as foundation Want to determine rates for each stage of sales funnel… November 14, 2018

Example Metrics Initial interest Conversion rates Purchase and pay Retention rates Customer advocacy COCA and LTV Gross Margins November 14, 2018

Target customers exposed to value proposition Example Metrics Initial interest Target customers exposed to value proposition What percentage actively seek to learn more E.g., ”click-through rate” November 14, 2018

Target customers in sales funnel Example Metrics Conversion rates Target customers in sales funnel Yield rates through each stage of funnel … and trends November 14, 2018

Whether customer pays for product How long does it take? Example Metrics Purchase and pay Ultimate conversion Whether customer pays for product How long does it take? What percentage do NOT purchase? November 14, 2018

Percentage of customers who re-subscribe Opposite of churn rate Example Metrics Retention rates Percentage of customers who re-subscribe Opposite of churn rate November 14, 2018

Big difference between satisfied customer and evangelist Example Metrics Customer advocacy Big difference between satisfied customer and evangelist Use the Net Promoter Score (NPS) “On a scale of 1-10 (10 being highest), how likely are you to recommend this product to a friend or colleague? November 14, 2018

Now that you have sales, estimate COCA and LTV Example Metrics COCA and LTV Now that you have sales, estimate COCA and LTV COCA – cost of customer acquisition LTV – lifetime value of customer November 14, 2018

Revisit costs of margins Example Metrics Gross Margins Revisit costs of margins Difference between cost of product and sales price Should go up over time… November 14, 2018

Before you release product, make sure team has: Example Metrics Before you release product, make sure team has: clearly defined metrics determined how these metrics will be observed determined what success looks like defined a time scale November 14, 2018

Outline Overview Example Metrics Workshop November 14, 2018

Worksheet on “Dogs will Eat the Dog Food” Workshop Worksheet on “Dogs will Eat the Dog Food” November 14, 2018