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The biggest driver for high LTV is repeat purchase behavior (in an e-commerce business) respectively a low churnrate (in a SaaS company). As a VC, the biggest challenge in evaluating LTV models is that metrics can dramatically change at scale.
Milestones and Metrics. Investors will want to know what advantages you have over the competition and how you plan on differentiating yourself. How do you plan on differentiating from the competition? Milestones and Metrics. Metrics are the numbers that you watch on a regular basis to judge the health of your business.
It makes the product more user-friendly and can also help build trust with customers and differentiate the product from competitors in the SaaS market. A visually appealing and consistent design can help create a strong brand image and differentiate the product from competitors.
In addition to talking about your solution, you’ll want to include a section to talk about your competition and how you intend to differentiate your service from other alternatives. Subscription businesses will need the requisite subscription sales forecast as long as some key metrics that savvy investors will want to see. Churnrate.
Unless you own a hosting company, “number of servers owned” is not a metric your CEO cares about. The calculation is dependent on your churnrate. More alignment with business goals. It only tends to weakly proxy revenue. For more recommendations, again, you probably want to be on my mailing list.
Customer retention is a metric that measures customer loyalty and how good your business is at keeping customers over time. A good retention rate means people continue to choose you over a competitor, deepening customer relationships and reducing churnrate. What is ecommerce customer retention (and why does it matter)?
Are not just reporting "hits", rather coming up with clever metrics. Quantitative Metrics / Analyses. While on the surface they might seem useful, I am always suspicious of compound metrics. See more here for Compound Metrics: Four Not Useful KPI Measurement Techniques ].
This unique selling proposition has differentiated itself from the competition because it makes an outright guarantee, as well as promises to directly address a problem. A higher percentage of conversions is probably a better metric than sheer number of conversions. Providing proper expectations will minimize the churnrate.
But if you don’t – now you have many cynical VCs lining up critiquing your CAC/LTV ratios, your churnrates, your poor performing cohorts. Money when you find product / market fit is an extreme differentiator. I know in my bones that there is a magic moment where capital plays a hugely differentiating role.
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