In short…

  • Measure the value created by marketing activities.
  • Understand the limitations of short-term efficiency metrics.
  • ROMI, EVA and NPV.
  • Manage B2B customer and distribution relationships.
  • Measure and manage growth and resilience via platforms.
  • Understand the value of product-centric and customer-centric brand platforms.
  • Develop business models by integrating value creation and appropriation processes.

Brand Equity Leads to Improvement in Shareholder Value

AARRR Framework for Customer Journey

product managers as well as marketers (and growth marketers) to split the customer’s journey with the company and its products into five parts: Acquisition, Activation, Retention, Revenue and Referral.


  • The acquisition is a part of the journey where the user visits your product/website. Let’s say a potential user Googles “project management tool” and ends up getting the below ad from
  • After clicking the ad, the user ends up on’s landing page. The obvious next step for someone who wants to give it a try would be to click any of the CTA buttons and create an account.
  • The acquisition part of the funnel aims to bring more people in and increase the conversion rate by optimising the landing page. This is taken care of by the marketing team.


  • The activation part of the funnel is when you ensure that the acquired customers/users are activated.
  • Here, activated means they start using the product, are set to achieve (at least once) the initial goal for which they signed up, and have a nice experience.
  • This largely involves the onboarding flow, where the user is welcomed, educated and helped in achieving their “Aha!” moment. through the product.
  • This is how onboards the user, starting with two consecutive emails with a six-minute gap.
  • Both emails smartly prompt the user to start using the product with a link to the “how to get started” video.
  • On the website, a pop-up asks a couple of onboarding questions so that the product can serve the user (me) in a personalised manner, with the next step being “suggested for you” templates. This is what we call persona-based onboarding.
  • The first step is always a big hurdle and for tools like this. Therefore, it is important to spoon-feed the users with what they might need. Also, it would be too much friction if the users have to create something from scratch just to find out if the tool works for them or not.
  • As soon as the users click on a template, they are shown small tooltips guiding them through each section and its usability. This is where they may need the most help. Do not let them get stuck here, because this is also the stage where it is easy for them to leave your product and never come back, as they are not committed enough.
  • For some businesses, including, activation also includes converting a free user to a paid customer. This involves an email that reminds users to convert to a paid plan if they don’t want to lose access to their data, but this should only be done by the end of the trial (if applicable) or after you have given users some time to try the product out.
  • In the app’s way of doing this, shows a green bar on the left side, as shown in the screenshot, saying “See plans”, which is a subtle push towards buying the product.
  • Other parts of increasing activation and decreasing friction include making the first step easier and achievable, removing unnecessary steps, giving clear action items, and not leaving the users confused.


  • The retention stage of the funnel is aimed at ensuring that the current users come back and use the product and stay on as customers. This is an important but sometimes overlooked step. Know that it is easier and cost-efficient to retain a customer than to acquire a new one; plus, retained customers move onwards through the funnel and are the ones who refer more people.
  • A few things should do here are email messages along the lines of “Your [template name] is waiting for you unfinished…” to people who have left the creation of their dashboard midway.
  • Educational emails on how the tool could be used, how other people are using it, the launch of new templates, case studies, and so on would keep creating the spark in the users to keep trying until they become avid users and need not be reminded regularly.
  • These users then also become your “power users” and may also become a strong and active community around your product (or product niche), which may become a strong reason for users to stay.
  • For tools such as, enough commitment from the users in terms of creating a working dashboard for themselves and making the decision to use it, makes or breaks it.
  • Similarly, on Google Drive, once you upload 15GB of data and hit the limit, it is hard to migrate the whole data and you end up paying.
  • A common tactic that companies (especially SaaS), including, use to increase retention is to promote yearly plans compared to the monthly ones by giving a discount. This also helps with cash flow.


  • The revenue stage of the funnel is to make sure you increase the revenue through each customer, which means increasing the lifetime value of the customer through up-selling and cross-selling wherever (if) applicable.
  • Know that the minimum CAC: LTV ratio you want to aim for is 1:3, which means you want to earn 3 or more dollars for each dollar spent on acquiring a customer. As a product manager, in tandem with the marketing team, you want to understand the customer acquisition cost and find ways to increase the LTV.


  • The referral stage is where your current users invite more users to use your product. Nothing fuels the growth of the product as much as referral does.
  • allows easy inviting of team members to access the board a user has created, which increases access within the company.
  • Typically, companies focus more on acquiring new customers (not within the same company as the inviter).
  • Apart from having a useful product (which is a given), a loyalty programme that rewards the current user for inviting a new user helps start the referral cycle.
  • Find out the best way to incentivize the user. It could be through giving discounts, cashback options, in-app rewards, etc. does not seem to be using the referral system.

DuPont Model (Example of Dell)

How marketing, sales, service, etc leads to financial leverage

Yellow – Made to Order (minimize working capital)

Blue: Outsourcing (minimize fixed assets)

Green – Service and Support (retention and margins)

Red – Minimize time to volume (sales)

Net margin – 8%

Asset Turnover – 10x

Return on Assets = Net Margin x Asset Turnover = 80%

Marketing Performance Metrics

  • ROMI: Return of marketing Investments (most commonly used)
  • EVA: Economic Value Added (Cash Flows)
  • NPV: Net Present Value (Value of Future earnings)

ROMI Calculation - Good

Economic Value Add (EVA) - Better

Net Present Value (NPV) - Best

Customer Life Time Value

Factors to be considered:

  • Annual Earnings by Product
  • Expected Value of Discounted Cash Flow
  • Expected Life (Retention Rate)
  • Cost of Retention
  • Aggregate earnings across products

Jack Welsh came up with the Customer Solution i.e. instead of selling just the product, sell services in the product ecosystem as well.

Product Centric (Intel) vs Customer Centric (Microsoft) brand

Aligning Customer and Shareholder Value

Customer and Shareholder Value at Pfizer

Metrics for Value Creation and Extraction

Zara Business Model

Ashok Leyland Business Model

Resilience of the Brands


Note: These are notes from the ISB Executive Education – Product Management program for my personal consumption.

In case you are looking for a Product Management course, I would highly recommend joining this cohort-based course.

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Categories: Product Management