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Great post Audrey.
Thanks for including the spreadsheet.
Posted by: Alexander Blom |
September 5, 2010 2:40 PMIn social gaming, two of our most important metrics are Average Revenue Per User (ARPU) and Average Revenue Per Paying User (ARPPU). Together, these numbers help you understand how well your game is monetizing and, when compared to your CPA, what your profit margin per user is. Social gaming treats games as services rather than products, essentially using the SaaS model, so I found this article particularly relevant to my business. Thanks for writing it, Audrey!
Posted by: CJ Cenizal |
September 5, 2010 11:31 PMI think this is the slidedeck that they were borrowed from...
http://www.slideshare.net/kaseybayne/carsonified-onlineconference100things-final
Posted by: Andy Davies |
September 6, 2010 1:27 AMLoved the article and the sheet. Very useful for SaaS companies.
Posted by: Punit Pandey |
September 6, 2010 4:03 AMAnother good resource:
http://www.forentrepreneurs.com/saas-metrics/
Posted by: Nico |
September 6, 2010 5:36 AMRegarding customer churn, we break down the number of customers who leave into two categories:
1. Controllable
2. Uncontrollable
Controllable losses are those where the customer left on their own for any number of reasons which we try to capture with a follow up email.
Uncontrollable losses are those the went out of business. Ex, freelancer who went back to a full-time job and stopped freelancing. This breakdown gives us a better idea about how well we are truly meeting the needs of the customer.
It takes more time and effort to follow up with the customer to find out the reason for leaving, but the insights gleaned from doing this are priceless.
Posted by: Scott Miller |
September 6, 2010 1:55 PMAudrey, good post.
Your readers might also be interested in a very in-depth blog post that I wrote on SaaS Metrics here:
http://www.forentrepreneurs.com/saas-metrics/
It goes into a lot more detail on the six numbers given above, as well as covering some important best practices.
Best, David
Posted by: David |
September 7, 2010 8:34 AM
Yesterday I examined one technique to boost your fan conversion when investing in Facebook advertising to acquire new Facebook fans. In addition to getting a lot of great feedback, I also heard from users who were critical of the technique. I’ll break down the rationale behind paying for fans momentarily. However a more important issue has emerged through the emails I’ve received over the past few days: people want instant results. There are a number of mistakes that beginning Facebook marketers make and based on the emails I’ve received, many of those mistakes are being made by our readers. You too may be making this critical mistake.
Why Buy Facebook Advertising To Acquire Fans?
Prior to explaining the early mistakes that many Facebook marketers make, let me first address why you would use Facebook advertising to acquire Facebook fans. As one commenter put it yesterday, “I question the idea of paying for Facebook ppc ads to get people to like your page. You’re paying Facebook to keep the traffic within Facebook. Seems like a great way to make money – for Facebook.” There is no doubt that this marketing model is a great way for Facebook to generate revenue, however the real reason you would buy Facebook advertising to gain fans is because you’ve exhausted your initial marketing channels.
Your company should have a blog which is being used to gain Twitter followers, Facebook fans, and email newsletter subscribers. However this marketing channel can only go so far. You may be the best writer in the world but it doesn’t single-handedly guarantee that you’ll be able to grow your audience as quick as you’d like. That’s when you begin using alternative marketing strategies. One of those strategies is promoting your Facebook Page. Why? Next to email, which is the best channel for reengaging your audience, Facebook is an extremely effective channel for reengagement. As I’ve previously emphasized, I’m not advocating killing other marketing channels in favor of Facebook marketing. Instead, Facebook is an excellent addition to your current marketing strategy.
Now that you’ve determine that you want to expand your marketing, and you have a budget to spend, why not spend that money on acquiring fans within your target audience?
The Single Most Critical Beginner’s Mistake
If you happen to have a budget to spend on Facebook advertising and you are interested in expanding your audience because your initial marketing channels have been maximized, that’s when you should start reading some of the guides we’ve created here. However if you are looking for that “silver bullet”, you are probably going to be disappointed. That’s because expanding your audience requires a lot of hard work. Setting aggressive yet reasonable expectations is critical. So how do you know if your expectations are unreasonable? I’ll provide you with a quick case study.
500,000 Fans In 12 Months
Yesterday, one of our readers reached out to me to ask for advice on their Facebook marketing strategy. After seeing the success of Paulo Coelho, who now has over 2.2 million fans, this individual, who was about to be a first-time published author, wanted to have 500,000 fans at a minimum in 12 months. It was nothing short of an audacious goal. To put things in perspective, Coelho’s book The Alchemist has become the best selling book in history. I should add that this book followed two other books that he wrote which were essentially complete failures. He also spent years perfecting the art of writing before penning the wildly successful The Alchemist.
Given how successful Coelho has been, and given that he has 2.2 million fans, what do you think a reasonable target for a first-time author is? I would suggest that 500,000 is too many. In fact, imagine if the first book that this author publishes turns out to be terrible. He’ll now have exposed his first-time work to a large audience who will be reserved about purchasing any of his work in the future.
Building A Legitimately Large Audience
The only way to build a large and legitimate audience is to develop ideas that spread organically. As you’ve perfected the art of developing powerful and compelling ideas, you expand your audience potential. At that point Facebook can be used as a tool to reach a larger portion of your total audience potential in a quick period of time. So don’t make this mistake: do not overestimate your total audience potential. If you have a flower shop in Charlotte, North Carolina, your maximum audience potential is the total number of people in Charlotte who purchase flowers. Even once you’ve determined your audience potential, take the time to perfect your message.
The fact is that your message can single-handedly provide more marketing power and develop a greater audience potential than any other marketing activity you perform. In the mean-time, invest heavily in developing your core audience. The harder you work at it, the more likely you will be able to develop a message which resonates with the masses. At that point, it’s time to build a legitimately large audience. I honestly believe that everybody reading this has the ability to build a legitimately large audience with the tools that are at their disposal, however I’m not a believer in silver bullets that will get you there.
If you’re willing to work hard, we’ll continue to provide you with strategies that will help maximize the impact of your Facebook marketing efforts.
eric seiger
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