Growth Models: The Science of Converting Users into Customers. with Scott Tousley
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1 Growth Models: The Science of Converting Users into Customers with Scott Tousley
2 Hi! I m Scott Tousley Freemium user acquisition at HubSpot Co-host of The Growth TL;DR Podcast Growth advisor to startups Nomadic / location independent
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5 What are growth models? Macro Growth Model A spreadsheet that helps you quantify and predict how your business holistically grows. Micro Growth Model A micro growth model is a way to predict experiment results and their impact on zoom out metrics.
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8 Process > Model > s 3 EXPERIMENTS 2 GROWTH MODEL 1 GROWTH PROCESS
9 1 Growth Process
10 Q1 Q2 Q3 Q4 W1 W13 W3 W5 W8 W9 W11 Annual W12 W10 W7 W6 W2 W4 W13 W1 W11 W9 W6 W5 W3 W2 W4 W7 W8 W12 W10 W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W13 W12 W11 W10 W9 W8 W7 W6 W5 W4 W3 W2 W1
11 W3 W6 W5 W4 W12 W13 W11 W10 W9 W8 W7 Q4 zoom out W1 W2 W3 W4 W5 W6 W7 Q1 zoom out W8 W9 W10 W11 W2 W1 W13 W12 W11 W10 W9 Q3 zoom out W8 W7 W6 W5 W4 W3 W2 North Star Metric W1 W13 Q2 zoom out W6 W7 W8 W9 W10 W11 W12 W5 W12 W13 W1 W2 W3 W4
12 W3 W6 W5 W4 W12 W13 W11 W10 W9 W8 W7 Week 12 Retention W1 W2 W3 W4 W5 W6 W7 New Users Acquired W8 W9 W10 W11 W2 W1 W13 W12 W11 W10 W9 Team Activation Rate W8 W7 W6 W5 W4 W3 W2 Weekly Active Team W1 W13 User Activation Rate W6 W7 W8 W9 W10 W11 W12 W5 W12 W13 W1 W2 W3 W4
13 W3 W2 W1 W13 W12 W6 W5 W4 W11 W10 W9 W12 W13 W11 W10 W9 W8 W7 Week 12 Retention Team Activation Rate W8 W7 W6 W5 W4 W3 W2 W1 W2 Weekly Active Team W1 W13 W3 W4 W5 W6 W7 New Users Acquired User Activation Rate W8 W9 W6 W7 W8 W9 W10 W11 W12 W10 W11 W5 W12 W13 W1 W2 W3 W4
14 W3 W2 W1 W13 W12 W6 W5 W4 W11 W10 W9 W12 W13 W11 W10 W9 W8 W7 Week 12 Retention Team Activation Rate W8 W7 W6 W5 W4 W3 W2 W1 W2 Weekly Active Team W1 W13 W3 W4 W5 W6 W7 New Users Acquired User Activation Rate W8 W9 W6 W7 W8 W9 W10 W11 W12 W10 W11 W5 W12 W13 W1 W2 W3 W4
15 The Growth Process 1. Annual North Star Metric 2. Quarterly Zoom Out Metrics 3. Weekly ation
16 2. Growth Models
17 Process > Model > s 3 EXPERIMENTS 2 GROWTH MODEL 1 GROWTH PROCESS
18 W3 W6 W5 W4 W12 W13 W11 W10 W9 W8 W7 Q4 zoom out W1 W2 W3 W4 W5 W6 W7 Q1 zoom out W8 W9 W10 W11 W2 W1 W13 W12 W11 W10 W9 Q3 zoom out W8 W7 W6 W5 W4 W3 W2 North Star Metric W1 W13 Q2 zoom out W6 W7 W8 W9 W10 W11 W12 W5 W12 W13 W1 W2 W3 W4
19 W3 W6 W5 W4 W12 W13 W11 W10 W9 W8 W7 Q4 zoom out W1 W2 W3 W4 W5 W6 W7 Q1 zoom out W8 W9 W10 W11 W2 W1 W13 W12 W11 W10 W9 Q3 zoom out W8 W7 W6 W5 W4 W3 W2 North Star Metric W1 W13 Q2 zoom out W6 W7 W8 W9 W10 W11 W12 W5 W12 W13 W1 W2 W3 W4
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21 AARRR
22 Pirate Metrics A A R R R
23 Pirate Metrics Acquisition Activation Retention Referral Revenue
24 Pirate Metrics Acquisition. people sign up for your product/service Activation. people experience aha moment Retention. people continually come back to you Referral. people tell your friends about you Revenue. people pay you money
25 Case Study: Facebook Acquisition. Create Facebook account Activation. Add 7 friends in 10 days Retention. Sign in once per day Referral. Facebook invite to a friend Revenue. Browse news feed, see ads, FB makes $$$
26 Case Study: Facebook Acquisition. Create Facebook account Activation. Add 7 friends in 10 days Daily Active User (DAU) Retention. Sign in once per day Referral. Facebook invite to a friend Revenue. Browse news feed, see ads, FB makes $$$
27 Case Study: Facebook Acquisition. Create Facebook account Activation Retention. Add 7 friends in 10 days. Sign in once per day North Star Metric Referral. Facebook invite to a friend Revenue. Browse news feed, see ads, FB makes $$$
28 Case Study: Spotify Acquisition. Create Spotify account Activation. Listen to 100 songs in 5 days Retention. Listen for at least 1 hour per week Referral. Share song with your friend Revenue. Upgrade to Spotify Premium for $10/month
29 Case Study: Spotify Acquisition. Create Spotify account Activation. Listen to 100 songs in 5 days Weekly Active User (WAU) Retention. Listen for at least 1 hour per week Referral. Share song with your friend Revenue. Upgrade to Spotify Premium for $10/month
30 Case Study: Spotify Acquisition. Create Spotify account Activation Retention. Listen to 100 songs in 5 days. Listen for at least 1 hour per week North Star Metric Referral. Share song with your friend Revenue. Upgrade to Spotify Premium for $10/month
31 Tomorrow s workshop! Acquisition. Activation Retention.. North Star Metric Referral. Revenue.
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34 Case Study: HubSpot CRM Acquisition. Create free HubSpot CRM account Activation. 2 people view 1 contact record Retention. 2 people view 1 contact record per week Referral. Tag coworker on contact record Revenue. Upgrade to paid HubSpot products
35 Case Study: HubSpot CRM Acquisition. Create free HubSpot CRM account Activation. 2 people view 1 contact record Weekly Active Team (WAT) Retention. 2 people view 1 contact record per week Referral. Tag coworker on contact record Revenue. Upgrade to paid HubSpot products
36 Case Study: HubSpot CRM Acquisition. Create free HubSpot CRM account Activation. 2 people view 1 contact record North Star Metric Retention. 2 people view 1 contact record per week Referral. Tag coworker on contact record Revenue. Upgrade to paid HubSpot products
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38 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate +.. Teams from Paid = Number of impressions * ad conversion rate * landing page conversion rate Zoom in experiments Landing page conversion rate = Copywriting + Visual Design + User Experience
39 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics
40 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics??????
41 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics
42 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate
43 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate??? = 10,000 * 30%
44 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate 3,000 = 10,000 * 30%
45 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate +..
46 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate ,000 = 5,000 +???? + 1,500
47 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate ,000 = 5, , ,500
48 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate +.. Teams from Paid = Number of impressions * ad conversion rate * landing page conversion rate Zoom in experiments
49 North Star Metric Case Study: HubSpot CRM Weekly Active Team = New Teams Activated + Existing Teams Retained - Existing Teams Lost Zoom out metrics New Teams Activated = New Teams Acquired * Team Activation Rate New Teams Acquired = Teams from SEO + Teams from Paid + Teams from Affiliate +.. Teams from Paid = Number of impressions * ad conversion rate * landing page conversion rate Zoom in experiments Landing page conversion rate = Copywriting + Visual Design + User Experience
50 Further Reading on Growth Models & Strategy Apply for the Reforge Growth Series course by Brian Balfour Indispensable Growth Frameworks from My Years at Facebook, Twitter and Wealthfront by Andy Johns Why Retention is the Silent Killer by Brian Balfour 6 Growth s from HubSpot to Improve Retention by Dan Wolchonok The Evolution of Acquisition Channels by James Currier The Law of Shitty Clickthroughs by Andrew Chen Why Activation is the Most Important Pirate Metric by Ty Magnin
51 3. s
52 W3 W2 W1 W13 W12 W6 W5 W4 W11 W10 W9 W12 W13 W11 W10 W9 W8 W7 Week 12 Retention Team Activation Rate W8 W7 W6 W5 W4 W3 W2 W1 W2 Weekly Active Team W1 W13 W3 W4 W5 W6 W7 New Users Acquired User Activation Rate W8 W9 W6 W7 W8 W9 W10 W11 W12 W10 W11 W5 W12 W13 W1 W2 W3 W4
53 W3 W2 W1 W13 W12 W6 W5 W4 W11 W10 W9 W12 W13 W11 W10 W9 W8 W7 Week 12 Retention Team Activation Rate W8 W7 W6 W5 W4 W3 W2 W1 W2 Weekly Active Team W1 W13 W3 W4 W5 W6 W7 New Users Acquired User Activation Rate W8 W9 W6 W7 W8 W9 W10 W11 W12 W10 W11 W5 W12 W13 W1 W2 W3 W4
54 8 in 10 experiments you run will fail.
55 Failed s = Learning Successful s = Learning Inconclusive = Learning
56 More experiments = Faster learning
57 More experiments = Faster learning Faster learning = Better predictions
58 More experiments = Faster learning Faster learning = Better predictions Better predictions = More productivity
59 More experiments = Faster learning Faster learning = Better predictions Better predictions = More productivity More productivity = Faster growth
60 More experiments = Faster learning Faster learning = Better predictions Better predictions = More productivity More productivity = Faster growth
61 More s = Faster Growth Where you can experiment and learn. Blog posts Homepages Pricing pages Shopping carts (ecommerce) Product pages Paid ads for direct sales Paid ads for leads (one off) (series of automated s) Tweets, Facebook posts, etc And many more. How you can experiment and learn. A/B test Multivariate tests URL redirects Smoke tests Heatmaps/clickmaps Qualitative surveys Quantitative surveys Conversations after experiments!
62 The experimental framework 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
63 Example: HubSpot CRM Problem: Inside the product, users have one option if they want to talk to sales -- book a meeting in the future. Question: However, what if users want to talk to sales now? Disclaimer All data is fake! However, all learnings are very real.
64 Problem: Today s UX
65 Problem: Today s UX
66 Problem: Today s UX
67 Problem: Today s UX
68 Problem: Today s UX
69 Problem: Today s UX
70 Problem: Today s UX
71 Problem: Today s UX
72 The experimental framework 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
73 Identify the metric PQL (Product Qualified Lead) Revenue = Total PQLs * Close Rate * Avg. Sales Price Close Rate = Copywriting + Segmentation + Design + Response Time Zoom in experiments
74 Ideate list of ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
75 Ideate list of ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team
76 Prioritize ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
77 Prioritize ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team Potential Impact Ease What is the potential for improvement? What is the ceiling and are we close to it? 1 = little room to improve 5 = much room to improve How big of impact do you predict this to have on your target metric? 1 = little impact on target metric 5 = massive impact on target metric How easy will this be to implement? Consider both technical and political. 1 = difficult 5 = easy
78 Prioritize ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team
79 Prioritize ideas 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team Zoom in experiment!
80 Write document 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
81 Tomorrow s workshop! 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team
82 Design: Proposed UX
83 Design: Proposed UX
84 Design: Proposed UX
85 Design: Proposed UX
86 Design: Proposed UX
87 Design: Proposed UX
88 Design: Proposed UX
89 Design: Proposed UX
90 Analyze results 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
91 Analyze results CONTROL Total PQLs: 219 Total Conversations: 37 17%
92 Analyze results VARIANT Total PQLs: 160 Total Conversations: 74 46%
93 Tomorrow s workshop! Link to data -
94 Results NEW Total PQLs: 160 Total Conversations: 74 TL;DR ` We ve nearly tripled the amount of 46% sales conversations. 17% 46%
95 Share results 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 6 Share 1 Identify 2 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live Analyze Ideate 5. Analyze results in experiment document Share results with team Document 4 Prioritize
96 Share results 1. Identify the metric 2. Ideate list of experiment ideas to improve metric 3. Prioritize ideas with P.I.E. 4. Write experiment document & turn experiment live 5. Analyze results in experiment document 6. Share results with team
97 The tools you need to run experiments Google Spreadsheets to analyze North Star and zoom out metrics growth Airtable or Trello as project management tool (experiment backlog) Google Presentations to visualize your experiments Google Optimize to run A/B tests on your website Google Analytics to analyze results on your website Atlassian s Wiki as central place to share What did we learn this week? Statistical significance calculator to double check results HubSpot (or similar tool) to run A/B tests with marketing automation Hotjar for heatmaps, clickmaps, and visitor recordings Marketing tools like SEMRush, Buzzsumo, Hunter.io, Ahrefs, etc
98 Tomorrow s workshop! Share 1 Identify 6 2 Analyze Ideate 5 3 Document 4 Prioritize
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