A great way to understand any business model is to answer the following simple question:
Can I make more profit from my customers than it costs me to acquire them?
This is effectively a study of the unit economics of each customer. To answer the question, we need two metrics:
- LTV – the Lifetime Value of a typical customer
- CAC – the Cost to Acquire a typical Customer
(For more on how to calculate LTV and CAC, click here.)
Entrepreneurs are usually overoptimistic about how much it costs to acquire a customer. This probably comes from a belief that customers will be so excited about what they have built, that they will beat a path to their doors to buy the product. The reality is often very different!
More SaaS + Software Stats
When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”
More Growth Strategy Stats
If your business if starving for new leads but struggling with all of the noise, rising costs, and a rapidly changing landscape of the digital marketing world, this seminar will equip you with what you need to gain momentum and leave with an actionable gameplan.