Entrepreneurship. STEAL THIS PRESENTATION! Startup Viagra: How to Pitch a VC. (51) Startups: What are some techniques startups use to initially draw attention to their product. Building financial plans - tops down or bottoms up? How Startups Can Use Metrics to Drive Success. You Manage What you Measure One of the things I discuss the most with the portfolio companies I’m involved with is that “you manage what you measure.” It’s a very important concept for me because in a startup you are constantly under pressure and have way too many distractions. Having a set of metrics that you watch & that you feel are the key drivers of your success helps keep clarity. And the more public you can make your goals for these key metrics the better. Make them widely available inside the company and share your most important goals with your board.
Transparency of goals drives performance because it creates both a commitment and a sense of urgency. Commitment & urgency are key drivers of success in startup businesses. You already know it from your personal lives. I ran my first marathon in London this way in 2003 raising $3,000 for Parkinson’s disease (and finishing in under 4 hours – my publicly stated goal). On measurement But what is industry standard? Don’t. 1. 2. 3. 4. 5. Customer lifetime value.
In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. The prediction model can have varying levels of sophistication and accuracy, ranging from a crude heuristic to the use of complex predictive analytics techniques.
One of the first accounts of the term Customer Lifetime Value is in the 1988 book Database Marketing, which includes detailed worked examples.[2] Purpose[edit] The purpose of the customer lifetime value metric is to assess the financial value of each customer. As Don Peppers and Martha Rogers are fond of saying, “some customers are more equal than others.”[3] Customer lifetime value (CLV) differs from customer profitability or CP (the difference between the revenues and the costs associated with the customer relationship during a specified period) in that CP measures the past and CLV looks forward. Methodology[edit] How to Compute Your Customer Lifetime Value. Everyone talks about customer lifetime value, but few have actually calculated it. The process is not that difficult. When you finish this article, you will be an expert. In the first place, what is lifetime value? It is the expected profit that you will realize from sales to a particular customer in the future.
Although it builds on past customer history, LTV is all about the future. It is based, primarily, on the customer's expected retention and spending rate, plus some other factors that are easy to determine. To understand LTV, let's begin with a typical LTV table. In this table, 100,000 customers are acquired originally. We are assuming a 70% cost of sales. The Gross Profit is simply the revenue minus costs. D = (1 + (i x rf))n Where D = Discount rate, i = interest rate, rf = the risk factor, and n = number of years that you have to wait. The lifetime value is calculated by dividing the cumulative LTV by the originally acquired 100,000 customers. I love metrics ! Allez, ça fait bien un mois ou deux que je n’ai pas tapé sur l’un de mes clous préférés : les métriques, les chiffres, le reporting, et tout et tout. La dernière fois, c’était avec un tableau pour suivre ses avancées en tant que startup, de manière chiffrée, sur tout un tas de métriques.
Cette fois-ci, back to business avec cette petite liste, non exhaustive de choses que vous devriez regarder de près (genre, une fois par semaine minimum) et ce dès le début de votre aventure. Plusieurs raisons à cela : si vous comprenez quelles métriques sont importantes, vous aurez compris votre businessplus vous prenez une habitude tôt, mieux c’est (et plus c’est facile)vous allez vous mettre la pression pour débloquer les scores des métriques « bloquées à zéro »et on ne peut être bon que si l’on s’évalue, c’est trop facile de dire « c’est trop tôt, on regardera les chiffres plus tard » et surtout très dangereux… Quoi qu’il en soit, c’est une très, très bonne habitude à prendre… Numbers not Napkins: Simple Startup Metrics.