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Jas P

[Companies with 8 figures of revenue] are worth many multiples of 8 figures to a... | H... - 0 views

news.ycombinator.com/item

pricing funding startup financial

shared by Jas P on 18 Mar 13 - No Cached
  • Let's say that you've built up, from essentially nothing, enough of a presence in your industry that you're selling $10 million a year of SaaS. That's only 10k accounts at a blended average of $100 a month -- far less if, like many SaaS companies, you make a significant whack of your money on custom enterprise deals that are not on the pricing page.
  • Now consider this company from the perspective of a Fortune 500 like, say, Intuit:1) They have software which exists.2) Their software creates clear value for customers. They have 10,000 people signing their praises and case studies up the wazoo. We know people will pay $100 a month for it -- we have copious, audited financial statements that prove that.
  • 3) Oh yeah, we're a Fortune 500 company. Launching a new product costs us $250 million and we could fail to produce something that both achieves technical success and produces any value for anyone anywhere. Assuming we do, selling to our built-in base of hundreds of thousands of customers is what we do best.Intuit can totally justify spending, say, $300 million to buy $20 million a year of revenue and the opportunity to 20x that by selling it to everyone who has ever heard of Quickbooks. Or mid 8 figures for something which has, say, a million a year in revenue.
Jas P

How To Turn Your Customers Into Marketers - 0 views

blog.kissmetrics.com/turn-customers-into-marketers

conversion customer development viral growth hacking

shared by Jas P on 29 Oct 12 - No Cached
  • So instead of launching a multi-million dollar ad campaign to bring in people, my gym implemented a growth hack. They turned customers into marketers by incentivizing them to bring in a friend. Then the friend possibly could become a member. The math works out for them as well. Let’s break it down: T-shirts ($3 each) x 2 = $6 Complimentary lunch = $0 A total of 100 members bring in a friend. The total cost of the promotion — $600. The result is that 3% of the 100 members convert their friends to members at $55 per month for each membership. The total ROI in the first month — $165/$600.
  • The promotional cost for each customer is very cheap. The t-shirt probably cost a few dollars, and the complimentary lunch probably was a gift certificate to a local restaurant that cost the gym $0.
  • Everything we’ll be discussing has one thing in common — incentives. Economists almost universally agree that people respond to them. Businesses should give their current and prospective customers an incentive to act on their offer. It has to benefit both parties or it won’t be nearly as effective. Not all the incentives are monetary, as we’ll see.
  • ...7 more annotations...
  • Refer a Friend One of the most common ways businesses spread their product and increase their viral coefficient (how many customers your current customers bring in) is through the use of referrals.
  • Contests Contests help users get energetic about your brand and the thought of winning something. If you’re creative enough with your contest design, it can also get you some PR. Dropbox has gained significant PR by having their annual “Dropquest” contest. Just Google Dropquest and you’ll see all the articles written about it. As a simple contest idea, a business can encourage users to tweet a pre-set message. This message can be about a recent feature. At random, the business can pick a person who tweeted out the message. Be creative and offer a big-time prize. You may get some PR and customers to boot. Avoid giving out a prize that’s unrelated to your business. Instead of giving them a car or a television, give them an upgrade.
  • If you’re a Netflix customer, you’ve probably noticed their promotional ads that come with the envelope the DVD’s are sent in. Many of them encourage you to give Netflix to a friend as a gift. According to Netflix, 75% of their customers come from these recommendations.
  • If you run a SaaS company, put a Like or Tweet button next to new feature announcements. You might be able to take advantage of user excitement and get them to share it with friends and followers. If your business has a blog, attach the Like and Tweet buttons next to every post. All of these social media buttons help get your product in front of more eyeballs and more prospective customers.
  • If I give this card to a friend, they receive a 25% discount. By spreading these products, I’m helping my friends by giving them a discount.
  • Your customers likely know a lot of people who are like them. This is especially true if you’re a SaaS company.
  • a customer could give a friend a trial of your product. So the friend receives the trial, and the customer gets some sort of discount or offer.
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