A shorter version of Feeding the Funnel. I gave this presentation at the Virtual Goods Forum

1. Feeding the funnel:finding the levers to turn users into profits Nicholas Lovell, GAMESbrief

2. About me Former banker (I don’t do that anymore) Former web entrepreneur Founder of GAMESbrief (www.gamesbrief.com) Author of How to Publish a Game

3. What am I talking about?

4. The funnel Users Profits

5. The funnel matters because it is your entire business To emphasise that, we need Equation I CPA < LTV = good business CPA > LTV = trouble Where: CPA is cost to acquire a user LTV is the Life Time Value of a user Why the funnel matters

6. How most people start 1% convert = £1,000.00 1% convert = £10.00 Say each costs £0.10 Only if the average user stays for 100 months! I’ll get some visitors Some who visit will register Some who register will subscribe Subscribers will spend an average of £10 per month I’ll put my Maserati on order

8. Facebook Connect

9. Importing contacts

10. TwitterCross-promote from other titles

11. Converting it Unique users Registered users Active users Paying users Revenues For your business: Draw the funnel Reduce to as few steps as possible Know the conversion rate for every step Tweak, iterate, test until you know exactly how your funnel converts

12. Monetizing it Advertising Virtual Goods Revenues Subscriptions Downloads There are many sources of revenue Virtual goods / microtransactions are flavour du jour (and my favourite) In your own business, focus on ARPPU

13. Find the levers Users are not the only metric The others depend on your business, but might include: Page views Video views Game downloads Purchase of a virtual item A metric that you can’t influence is no good Focus on LEVERS

14. Digression: what do users buy

15. If you can, harness virality A viral business can be an insanely profitable business CPA is close to zero, so even if LTV is low, your business is great Time for Equation II: Viral coefficient = A% x B x C% Where A% = Percentage of your users who invite a friend B = Number of friends they invite C% = Percentage of friends who accept the invitation If viral coefficient > 1.3, time to order the Maserati

16. Levers are your secret weapon Find the metrics that have the biggest impact on the bottom line Try to reduce the metrics to one! Three is more usual Make sure they are LEVERS Laser-like focus on pulling and improving these LEVERS The result will be a better business and a happier team

17. Thank younicholas@gamesbrief.comFollow my blogwww.gamesbrief.comBuy my book