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Gerbz LLC is a transparent lifestyle business incubator. We're sharing what we learn as we validate our process for evaluating and transforming ideas into successful businesses.

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6PSBMLFBL1

After building an MVP, running a beta, learning as much as possible about my customers it’s time to kick off the first phase of customer acquisition. In terms of “Lean Startup” methodology and “Innovation Accounting” goes, this is going to be my first pass at the Build, Measure, Learn feedback loop. As for documenting the loop here on this blog, I seriously struggled to come up with a good name for this. Is it a phase? an experiment? a feedback loop? a loop? Instead of banging my head against the wall I decided to condense it down to an acronym and move on: 6PSBMLFBL1 (6PS Build Measure Learn Feedback Loop 1). Pretty awesome right?

Preparation for entering the first Build, Measure, Learn feedback loop is a bit more strenuous then future loops will be (hopefully). That’s because there’s more to build and I needed to setup my systems for measuring and experimenting. The best way to approach this is to do it backwards. Start with what you want to learn. Based on what you want to learn, how are you going to measure it. And then build it.

Learn

I’m going to start with some of the assumptions I outlined in my marketing plan and also a few smaller experiments about acquiring customers in general. Here’s what I want to learn in this first loop:

  • Can I reach my target customers using online advertising?
  • Which channels give me the best bang for my buck (ie convert best)?
  • Can an eBook be used as a foundation for telling my story and attracting/building a list of prospects?
  • Is my eBook interesting enough to drive sales of my product?
  • What language works best with my customers: Investor or Trader
  • Which price points result in most conversions at the highest profits?
  • What is my baseline customer acquisition cost?
  • What are my conversion rates at each step of my funnel?
  • What is my overall conversion rate?
  • Why aren’t prospects converting into customers?

Measure

In order to learn all of this, I need to design and measure my funnel in great detail. Here’s a high level overview of my funnel with conversion estimates at each step.

customer acquisition funnel

We want the funnel to be short and sweet because we’ll be losing prospects at every step.  It’s also important that the funnel not be too short because we want to ensure customers are educated on the product and we’ve gained their trust by the time they reach a purchasing decision.

Based on the estimates above, I hope to convert 1 paying customer for every 16 people who read the eBook.

I’ll primarily be using Google Analytics to measure the effectiveness of my funnel. How to do this is a whole blog post in it of itself but we’ll primarily be utilizing a combination of Campaign Tracking Tags, Events, Goals and Multi-Channel Funnels. We’ll also utilize Google Analytics Experiments to run A/B test on landing pages. Stats will also be provided by the various advertising platforms we test as well as Campaign Monitor, our email autoresponder provider.

Build

There are a lot of moving pieces to this. Things I need to “build” include:

  • A landing page where prospects exchange their contact information for the eBook
  • A mechanism for delivering the eBook
  • The eBook itself (done)
  • An email autoresponder sequence
  • A landing page describing and selling the product
  • A payment mechanism for purchasing the product
  • A mechanism for delivering the product
  • The product itself (done)

I realize I also don’t have a concrete metric for deciding when loops are complete and it’s time to re-evaluate. I’ll just have to feel it.

Above all else, driving sales during this loop will be viewed as an EPIC win.

Here we go!