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:
(How to calculate LTV and CAC)
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!
ForEntrepreneurs.comHigh-growth companies offer a return to shareholders 5 times greater than medium-growth companies
Investment in marketing automation tools is expected to reach $25 billion by the year 2023
In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.
SaaS organizations are now operating in over 100 countries
Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts
Investment in marketing automation tools is expected to reach $25 billion by the year 2023