8. Hacking Monetization

Question 1

What is the ultimate goal of acquiring, activating, and retaining customers?

Answer 1

To earn revenue from them.

Question 2

What does increasing the lifetime value (LTV) of customers refer to?

Answer 2

Earning more revenue from each customer over time.

Question 3

What is growth hacking primarily focused on?

Answer 3

Devising experiments for optimizing earnings from your customer base.

Question 4

What do many growth teams fail to capitalize on?

Answer 4

Tactics for increasing revenue, focusing mostly on acquisition and customer activation.

Question 5

How do retail companies typically increase revenue per customer?

Answer 5

By persuading customers to purchase more of whatever it is they sell.

Question 6

For SaaS companies, how is revenue per customer increased?

Answer 6

By getting more subscribers to renew their subscriptions and upgrade to higher-fee levels.

Question 7

What is the first step in mapping your monetization funnel?

Answer 7

Perform data analysis to highlight opportunities in the customer journey.

Question 8

What is often referred to as the purchase funnel in retail companies?

Answer 8

The mapping of the customer journey focusing on purchasing steps.

Question 9

What are pinch points in the customer journey?

Answer 9

Steps where potential earnings are lost.

Question 10

What common pinch point do e-commerce companies face?

Answer 10

Abandonment of purchases between selecting an item and completing the purchase.

Question 11

What is a common underoptimized area for SaaS businesses?

Answer 11

Pages displaying the options for plans and their prices.

Question 12

What metrics should ad-revenue-driven companies track?

Answer 12

Average revenue per user (ARPU) and engagement metrics.

Question 13

What cohort groupings should businesses analyze for revenue opportunities?

Answer 13

Higher-profit vs. lower-profit customers.

Question 14

How did HotelTonight increase its purchase rates?

Answer 14

By targeting users who connected over 3G or 4G rather than Wi-Fi.

Question 15

What is a potential strategy for e-commerce companies to boost customer spending?

Answer 15

Encouraging users who make one purchase to buy again within 90 days.

Question 16

What should SaaS companies consider when analyzing customer cohorts?

Answer 16

The different types of businesses and their willingness to pay.

Question 17

Why is it important to analyze monetization by country?

Answer 17

Different countries have different payment options and service norms.

Question 18

What is the purpose of creating customer personas?

Answer 18

To better generate ideas for ways to satisfy customers’ specific wants and needs.

Question 19

What should growth teams do to find out what benefits customers want?

Answer 19

Conduct surveys to gather customer feedback on improvements.

Question 20

Fill in the blank: The first set of cohorts to break out are the _______.

Answer 20

higher-profit versus lower-profit customers.

Question 21

True or False: Growth teams should avoid asking customers for feedback.

Answer 21

False.

Question 22

What is the primary mission of growth teams regarding customers?

Answer 22

To provide customers with services and products they find most appealing and that best serve their needs.

Question 23

How can companies increase the volume of customer purchases?

Answer 23

By offering additional items to purchase or features to pay for.

Question 24

What should growth teams do to decide on new product features?

Answer 24

Systematically present ideas through surveys and experiment with those products or features before wider implementation.

Question 25

What was the result of the BitTorrent team's survey regarding new features?

Answer 25

The battery saver feature drove a 47 percent increase in daily revenue.

Question 26

What is personalization in the context of customer relations?

Answer 26

A tactic for building a stronger relationship with customers to help retain them.

Question 27

What is a recommendation engine?

Answer 27

Algorithmic programs that customize which items are recommended to customers based on their search history and buying habits.

Question 28

What is the Jaccard index used for?

Answer 28

To determine how similar two products are to each other.

Question 29

How is the Jaccard similarity score calculated?

Answer 29

The size of the intersection of two items divided by the size of the union of those items.

Question 30

What can happen if a company is too intrusive with customization?

Answer 30

It can backfire and be perceived as creepy, leading to customer backlash.

Question 31

What incident highlighted the risks of intrusive personalization?

Answer 31

Target inadvertently outing a teenage woman for her pregnancy through targeted coupons.

Question 32

What is one method to test the effectiveness of personalization?

Answer 32

Sending personalized notifications to a small segment of customers to gauge their response.

Question 33

What is the challenge in optimizing pricing?

Answer 33

Finding the balance between pricing too low and losing revenue or pricing too high and turning away customers.

Question 34

What factors should be considered when setting prices for physical goods?

Answer 34

Production costs, marketing, delivery costs, and desired profit.

Question 35

What are 'charm prices'?

Answer 35

Prices that end in 9, 99, 98, or 95, which can boost sales.

Question 36

What is the recommended approach for determining the ideal price for SaaS products?

Answer 36

Conducting surveys asking customers about price points they find acceptable.

Question 37

What is 'persona/pricing fit'?

Answer 37

The alignment of valuable features and customer price points to build effective pricing strategies.

Question 38

What does cohort analysis help identify?

Answer 38

Different types of customers and their preferences.

Question 39

What might a growth team experiment with based on customer willingness to pay?

Answer 39

Offering higher-priced plans for customers who want more features.

Question 40

Fill in the blank: To gauge customer preferences, growth teams should use _______.

Answer 40

surveys.

Question 41

True or False: Personalization can enhance customer relationships but must be done carefully to avoid being intrusive.

Answer 41

True.

Question 42

What should growth teams do continually regarding pricing?

Answer 42

Experiment with pricing just as they do with other elements of the business.

Question 43

What can be a consequence of getting personalization wrong?

Answer 43

It can dramatically hurt revenue rather than improve it.

Question 44

What does All-Access Andrew represent in customer preferences?

Answer 44

A customer who wants all the bells and whistles the service offers

Question 45

What is a potential strategy for customers willing to pay more than the basic subscription?

Answer 45

Offer a higher-priced plan with additional features

Question 46

What should pricing be proportional to?

Answer 46

The value customers are getting from the use of the product

Question 47

What are value metrics?

Answer 47

Metrics on which charges to customers are based

Question 48

What are three questions to determine your value metric?

Answer 48

* Does the value metric align with where your customer perceives value? * Does the metric scale as the customer uses the product more? * Is it easy to understand?

Question 49

Why is it important to present pricing options clearly?

Answer 49

So customers can evaluate whether the extra charge for higher plans is worthwhile

Question 50

What should growth teams experiment with regarding ad-revenue-based products?

Answer 50

Pricing of the advertising units and different ad unit types

Question 51

What is dynamic pricing?

Answer 51

A strategy that continuously changes prices based on various factors to maximize purchases and profits

Question 52

What is pricing relativity?

Answer 52

The principle that people's perceptions of prices are influenced by the prices of other options offered

Question 53

What is a decoy package?

Answer 53

A product option that is priced to help customers better understand the relative value of the items

Question 54

What lesson was learned from the SmartShoot pricing experiment?

Answer 54

Adding a decoy product increased annual plan purchases by 233%

Question 55

True or False: Lowering prices always leads to higher sales volume.

Answer 55

False

Question 56

What was the outcome of Qualaroo's pricing experiment?

Answer 56

Raising prices significantly boosted revenue

Question 57

What is the penny gap?

Answer 57

The perception of a large difference between a product being free and paying even a small amount

Question 58

What was the result of making Stuart K. Hall's 7 Minute Workout app free?

Answer 58

Downloads surged to an average of 72,000 per day and overall revenue increased by 300%

Question 59

What is a common revenue model for the highest-grossing iOS games?

Answer 59

Free for download with monetization through ads or in-app purchases

Question 60

What percentage of users did not pay anything to use the app?

Answer 60

97 percent

Question 61

What is the common revenue model for the top-grossing iOS games?

Answer 61

Free for download, monetized through ads or in-app upgrades

Question 62

What is a critical strategy for monetizing free users?

Answer 62

Optimizing persuasion for upgrades

Question 63

Which app displays premium features to encourage free users to upgrade?

Answer 63

Spotify

Question 64

What monetization strategy do many popular games use?

Answer 64

Virtual goods or in-app currency

Question 65

What did Electronic Arts report in revenue from in-game virtual goods in Q4 2015?

Answer 65

$173 million

Question 66

What currency does the dating app Coffee Meets Bagel sell?

Answer 66

Beans

Question 67

What are some revenue generation methods for freemium products?

Answer 67

* Advertising * Referral fees * Sponsorships * Selling user data

Question 68

What should growth teams measure to optimize revenue strategies?

Answer 68

What’s working and what customers are willing to pay for

Question 69

Who is a key figure in the study of behavioral economics mentioned in the text?

Answer 69

Daniel Kahneman

Question 70

What principle explains the human tendency to return favors?

Answer 70

The principle of reciprocity

Question 71

How did Costco apply the principle of reciprocity?

Answer 71

By offering in-store samples and demonstrations

Question 72

What is the principle of commitment and consistency?

Answer 72

We are likely to take actions consistent with previous actions

Question 73

How does Amazon utilize the principle of commitment?

Answer 73

Through the Wish List feature

Question 74

What motivates consumers to purchase according to social proof?

Answer 74

Desire to follow social norms

Question 75

What was the result of HMRC's social proof strategy in tax collection?

Answer 75

Collections jumped from 57 to 86 percent

Question 76

What acronym represents effective testimonial factors?

Answer 76

CRAVENS

Question 77

What is the principle of authority in consumer behavior?

Answer 77

We trust experts and authoritative figures

Question 78

How did Kaya Skin Clinic increase sales using the principle of authority?

Answer 78

By adding the word 'expert' to their call to action

Question 79

What principle explains why we buy more when recommended by likable people?

Answer 79

The principle of liking

Question 80

How did Airbnb improve their referral program?

Answer 80

By including a photo of the person sending the referral

Question 81

What is the principle of scarcity?

Answer 81

We are motivated to act when we fear missing out

Question 82

How does Booking.com use the principle of scarcity?

Answer 82

By showing missed deals and how many people are booking

Question 83

What should growth teams continue to work on to avoid growth stalls?

Answer 83

Acquisition, activation, retention, and monetization