E245 Demand CreationAnn Miura-Ko
January 2011
Agenda
Demand Creation Definition Direct customer relationship Indirect customer relationship Metrics and Experimentation
3images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem) Customer
Development Team
Agile Development
CUSTOMER RELATIONSHIPS
what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
Demand Creation
How will customers segments hear about your product?
How does market type impact my strategy? How much will it cost to acquire a customer
using these strategies?
Market TypeExisting Resegmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational improvement
Competitors Many Many if wrong, few if right
None
Risk Lack of branding, sales and distribution ecosystem
Market and product re-definition
Evangelism and education cycle
Examples Google Southwest Groupon
Market Type determines: Rate of customer adoption
Sales and Marketing strategies Cash requirements
How does market type influence demand creation?
Demand Creation by Market Type
Create, drive demand into your sales channelExisting
Resegmented
New
Educate the market about what’s changed
Drive demand into your sales channel
Educate the market Identify and drive early
adopters into your sales channels
Who needs to hear about you?
Suppliers
Channels
Government
Partners
End User
Influencer / Recommender
Economic Buyer
Decision Maker
Demand Creation Feeds the Sales Funnel
PayingCustomers
$
Demand
Creation Acquisition
Agenda
Demand Creation Definition Direct customer relationship Indirect customer relationship Metrics and Experimentation
Getting Free Users
SEO (without consultants) Blogging / Sharable content Social Media / Gaming
Mechanics Communities Proven viral coefficient > 1
NOTE: “Viral” isn’t a strategy, it’s a product feature you either have or you don’t
Demand Creation
Paid Channels PR Demand Capture
- SEM- “Free” products (e.g. widgets)- Biz Dev- Affiliate Marketing
Market Education- Webinars- Email marketing- Trade Shows- Analyst Reports- Direct Sales- TV / Radio
Demand
Creation
How many come through the first step?
How much does that cost?
What is the conversion between each level?
How much in revenues can you get out of each acquired customer?
Agenda
Demand Creation Definition Direct customer relationship Indirect customer relationship Metrics and Experimentation
Example: Healthcare
Healthcare – system requirements
FDA
Payer Approval of product category Compelling clinical benefits
and cost reduction
Product approval Manufacturing approval Quality control process
approval
Healthcare & Marketing Free samples Professional papers Speeches by leading academics and
influential doctors Leading institution as reference
customer Conference presentation Continuing medical education
Product Champions
FDA
Restrictions on user generated content- Adverse event postings- Off label use postings
Restrictions on direct selling to doctors
Critical questions
What are critical regulations and approval processes that need to happen prior to launch of product?- Industry- Federal / State
Are there regulations on marketing efforts as well?
Who influences the purchasing decision and how can they become an ally?- What is required to be endorsed?
Agenda
Demand Creation Definition Direct customer relationship Indirect customer relationship Metrics and Experimentation
Customer Acquisition Cost
PayingCustomers
$
Demand Creation
Acquisition
To get one customer here
How much do you have to spend here
The Sales FunnelEnterprise Software
Leads
PayingCustomers
$
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Fir
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Fe
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Pro
po
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Other Sales Funnels
What does your funnel look like? How long does each part of the funnel
take? What % converts between each section?
Visit Sign Up Activate Upgrade
Informational Meeting
TrialContract
NegotiationSigned
Contract
1.
2.
Cost of Customer Acquisition Calculation
David Skok
Cost of Customer Acquisition Calculation
Demand Creation Pivot
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