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Tell me your 3 main KPIs
Startups face several key metrics that must be constantly optimized for their success--namely lifetime value (LTV), customer acquisition cost (CAC), and growth rate.
Although they vary by industry, each indicates a different area of good financial health.
- LTV measures the total value that a customer brings to a business over their lifetime
- CAC is a calculation of how much it costs to acquire each new customer
- Growth rate indicates the size and rate of the company’s growth over a period of time.
By regularly tracking, analyzing and optimizing these metrics, startups can identify where to double down on their investments and ensure they’re efficiently scaling their business.
What about you?
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Alex Shilin
MRR, Churn, Active Users.
I find LTV/CLV to be debatable e.g. do you predict their life-time or look at historical figures. In growing businesses historical figures don't always paint the right picture.
I like CAC, and would add it to #4, just need to keep consistency in measuring it. e.g. Do you include Customer Success cost into it? Or only Acquisition Sales & Marketing? Marketing ALL costs or some? Marketing tools costs, CRM?
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@alex_shilin thanks for sharing! I don't include CS cost, but I do include MKT all costs. CRM of course is part of Customer Service for me.
MRR and M/M growth. As well as conversion rates - visitor to trial, trial to paid. Now what do you actually include in the CAC? Do you include the salary of the sales team if you have one?
@pixelpirat of course. Every $ spent on acquisition. I know, sometimes it’s hard to define when the same person plays different roles. But we can do it. It’s worth it