1. E245 Demand Creation Ann Miura-Ko January 2011

2. Agenda  Demand Creation Definition  Direct customer relationship  Indirect customer relationship  Metrics and Experimentation

3. 3 images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities key resources value proposition

4. 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

5. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?

6. 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?

7. Market Type ExistingResegmentedNew CustomersKnownPossibly KnownUnknown Customer NeedsPerformanceBetter fitTransformational improvement CompetitorsManyMany if wrong, few if right None RiskLack of branding, sales and distribution ecosystem Market and product re- definition Evangelism and education cycle ExamplesGoogleSouthwestGroupon Market Type determines:  Rate of customer adoption  Sales and Marketing strategies  Cash requirements How does market type influence demand creation?

8. Demand Creation by Market Type  Create, drive demand into your sales channel Existing 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

9. Who needs to hear about you? Suppliers Channels Government Partners End User Influencer / Recommender Economic Buyer Decision Maker

10. Demand Creation Feeds the Sales Funnel Paying Customers $ Demand Creation Acquisition

11. Agenda  Demand Creation Definition  Direct customer relationship  Indirect customer relationship  Metrics and Experimentation

12. 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

13. 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

14.  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?

15. Agenda  Demand Creation Definition  Direct customer relationship  Indirect customer relationship  Metrics and Experimentation

16. Example: Healthcare

17. Healthcare – system requirements FDA Payer  Approval of product category  Compelling clinical benefits and cost reduction  Product approval  Manufacturing approval  Quality control process approval

18. 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

19. 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?

20. Agenda  Demand Creation Definition  Direct customer relationship  Indirect customer relationship  Metrics and Experimentation

21. Customer Acquisition Cost Paying Customers $ Demand Creation Acquisition To get one customer here How much do you have to spend here

22. The Sales Funnel Enterprise Software Leads Paying Customers $ Qualified Lead First Sales Call Demonstration Feasibility Proposal Purchase Order

23. Other Sales Funnels  What does your funnel look like?  How long does each part of the funnel take?  What % converts between each section? VisitSign UpActivateUpgrade Informational Meeting Trial Contract Negotiation Signed Contract 1. 2.

24. Cost of Customer Acquisition Calculation David Skok

25. Cost of Customer Acquisition Calculation

26. Demand Creation Pivot