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Engagement Loops
       The Levers and Metrics of Engagement




           Eric Ries
Blog: startup lessons learned
http://www.facebook.com/event.php?eid=23439274966
PHAME
• Problem – customers don’t always stick
• Hypothesis – we can do something about it
• Action – by pulling the three levers of
  engagement
• Metrics – and measuring the engagement
  factor
• Experiments –find the points of highest
  leverage; iterate, iterate, iterate
Levers of engagement
• Synthetic notifications
• Organic notifications
• Positioning (the battle for your mind)
Positioning > Organic > Synthetic
• Warhammer Online vs. World of Warcraft
Engagement Loop
• A customer decides to return to your product
• They decide to take some action
• This action may have side effects, such as
  sending out notifications
• These side effects affect other customers, and
  some side effects are more effective than
  others.
• Some affected customers decide to return to
  your product...
Engagement Loop example
• synthetic message: quot;upload some photos!quot; Some
  percentage of customers click through. (C)
• Some percentage of those actually upload. (D)
• Those customers get prompted to tag their
  friends in their photos. Some percentage of them
  do (A), and these result in a certain number of
  emails sent (B).
• Each friend that's tagged gets an email. Some
  percentage of them click through. (C)
• Of those, some percentage are themselves
  convinced to upload and photos. (D)
Engagement Loop
                                                                 actionable metrics




                                                     Messages
             Message     Conversion to
                                                      Sent Per
            Conversion      Action
                                                    Engagement


synthetic
message
            Receive                                               Send
                                           Action
            Message                                              Message




                                         organic
                                         messages
Engagement Factor
• Engagement Factor (per event) 
msgs sent/action * message conversion *
  conversion to action * messages sent *
  message conversion

• Engagement Factor (per user) 
  engagement factor (event) * events/user
Integrating with the Viral Loop


                                               Engagement
                                       Engag
           Invite
                                               loop
                                       ement

   Viral
                    Viral/Engagement
   Loop
SuperPoke Engagement Loop
                          Invite Page                  Send invite            Send Message
New users
notification/invite




             Viral loop                 Viral loop 2
                                                                Engagement
                                                                                Message
                                                                   Loop




                                                                             Receive Message
SuperPoke Engagement Loop
                          Invite Page                  Send invite               Send Message
New users
notification/invite


                                                                Conversion to
                                                                   Action
             Viral loop                 Viral loop 2
                                                                Engagement                       Messages
                                                                                   Message
                                                                   Loop                           Sent Per
                                                                                                Engagement


                                                                                                   Message
                                                                                                  Conversion




                                                                                Receive Message
Friends for Sale Engagement Loop
                       Invite Page        Action
                                                                            • Buy
                                                   Send Message             • Do
New users
                                                                            • Favor
notification
                                                                            • Gift
/invite
                                                   Engagement
               Viral loop 1     Viral loop 2          Loop




                                                                  Receive
                                                                  Message
Friends for Sale Engagement Loop
                                                                         Messages
                                                                          Sent Per
                       Invite Page        Action                        Engagement
                                                                                         • Buy
                                                         Send Message                    • Do
New users
                                                                                         • Favor
notification
                                                                                         • Gift
/invite
                                                        Engagement                    Message
               Viral loop 1     Viral loop 2                                         Conversion
                                                           Loop


                                                   Conversion to
                                                      Action




                                                                        Receive
                                                                        Message
Split-testing all the time
• A/B testing is key to validating your
  hypotheses
• Has to be simple enough for everyone in the
  company to use and understand it
• Make creating a split-test no more than one
  line of code:
         if( setup_experiment(...) == quot;controlquot; ) {
            // do it the old way
         } else {
           // do it the new way
         }
The AAA’s of Metrics
• Actionable
• Accessible
• Auditable
Measure the Macro
• Always look at cohort-based metrics over time
• Split-test the small, measure the large
                      Control Group (A)   Experiment (B)
   # Registered       1025                1099
   Downloads          755 (73%)           733 (67%)
   Active days 0-1    600 (58%)           650 (59%)
   Activedays 1-3     500 (48%)           545 (49%)
   Active days 3-10   300 (29%)           330 (30%)
   Activedays 10-30   250 (24%)           290 (26%)
   Total Revenue      $3210.50            $3450.10
   RPU                $3.13               $3.14
Thanks!

• Blog:
  http://startuplessonslearned.blogspot.com/

• Web 2.0 Expo: April 1st, 2009
  “The Lean Startup: a Disciplined Approach to
  Imagining, Designing, and Building New
  Products.”

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Eric Ries Engagement Loops The Levers And Metrics Of Engagement

  • 1. Engagement Loops The Levers and Metrics of Engagement Eric Ries Blog: startup lessons learned http://www.facebook.com/event.php?eid=23439274966
  • 2. PHAME • Problem – customers don’t always stick • Hypothesis – we can do something about it • Action – by pulling the three levers of engagement • Metrics – and measuring the engagement factor • Experiments –find the points of highest leverage; iterate, iterate, iterate
  • 3. Levers of engagement • Synthetic notifications • Organic notifications • Positioning (the battle for your mind)
  • 4. Positioning > Organic > Synthetic • Warhammer Online vs. World of Warcraft
  • 5. Engagement Loop • A customer decides to return to your product • They decide to take some action • This action may have side effects, such as sending out notifications • These side effects affect other customers, and some side effects are more effective than others. • Some affected customers decide to return to your product...
  • 6. Engagement Loop example • synthetic message: quot;upload some photos!quot; Some percentage of customers click through. (C) • Some percentage of those actually upload. (D) • Those customers get prompted to tag their friends in their photos. Some percentage of them do (A), and these result in a certain number of emails sent (B). • Each friend that's tagged gets an email. Some percentage of them click through. (C) • Of those, some percentage are themselves convinced to upload and photos. (D)
  • 7. Engagement Loop actionable metrics Messages Message Conversion to Sent Per Conversion Action Engagement synthetic message Receive Send Action Message Message organic messages
  • 8. Engagement Factor • Engagement Factor (per event)  msgs sent/action * message conversion * conversion to action * messages sent * message conversion • Engagement Factor (per user)  engagement factor (event) * events/user
  • 9. Integrating with the Viral Loop Engagement Engag Invite loop ement Viral Viral/Engagement Loop
  • 10. SuperPoke Engagement Loop Invite Page Send invite Send Message New users notification/invite Viral loop Viral loop 2 Engagement Message Loop Receive Message
  • 11. SuperPoke Engagement Loop Invite Page Send invite Send Message New users notification/invite Conversion to Action Viral loop Viral loop 2 Engagement Messages Message Loop Sent Per Engagement Message Conversion Receive Message
  • 12. Friends for Sale Engagement Loop Invite Page Action • Buy Send Message • Do New users • Favor notification • Gift /invite Engagement Viral loop 1 Viral loop 2 Loop Receive Message
  • 13. Friends for Sale Engagement Loop Messages Sent Per Invite Page Action Engagement • Buy Send Message • Do New users • Favor notification • Gift /invite Engagement Message Viral loop 1 Viral loop 2 Conversion Loop Conversion to Action Receive Message
  • 14. Split-testing all the time • A/B testing is key to validating your hypotheses • Has to be simple enough for everyone in the company to use and understand it • Make creating a split-test no more than one line of code: if( setup_experiment(...) == quot;controlquot; ) { // do it the old way } else { // do it the new way }
  • 15. The AAA’s of Metrics • Actionable • Accessible • Auditable
  • 16. Measure the Macro • Always look at cohort-based metrics over time • Split-test the small, measure the large Control Group (A) Experiment (B) # Registered 1025 1099 Downloads 755 (73%) 733 (67%) Active days 0-1 600 (58%) 650 (59%) Activedays 1-3 500 (48%) 545 (49%) Active days 3-10 300 (29%) 330 (30%) Activedays 10-30 250 (24%) 290 (26%) Total Revenue $3210.50 $3450.10 RPU $3.13 $3.14
  • 17. Thanks! • Blog: http://startuplessonslearned.blogspot.com/ • Web 2.0 Expo: April 1st, 2009 “The Lean Startup: a Disciplined Approach to Imagining, Designing, and Building New Products.”