Saved by Timour Kosters and
Revisiting Lifetime Value and Customer Acquisition
The total net profit that you earn on average over the course of your relationship with a customer (Customer Lifetime Value, or CLV) must exceed the amount you spend on average to acquire a new customer (Customer Acquisition Cost, or CAC). In general, the higher the price of your product, the more you have to spend to make a sale—and the more it
... See morePeter Thiel • Zero to One: Notes on Start Ups, or How to Build the Future
Imagine another pair of businesses. The first makes $1 on each customer it signs up; the second makes $100,000 from each customer it signs up. To predict which company will grow faster, you need to know only one additional thing: how much it costs to sign up a new customer. Imagine that the first company uses Google AdWords to find new customers
... See moreEric Ries • The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
Customer math for a new business
How much does it cost to get a new customer?
How much do you make from every interaction with that customer?
How long does the customer stick around?
How many new customers will existing customers bring you over time?
How much does it cost to get a new customer?
How much do you make from every interaction with that customer?
How long does the customer stick around?
How many new customers will existing customers bring you over time?
Customer math for a new business
First, we should expect the price of attention to continue to rise. In a world of rising noise — with far more products, services, bots, and content than humans to consume them — we should expect the price of attention to continue to rise, and only be limited by the lowest sustainable margins of those that need to purchase it. To rephrase Bezos:
You... See more