I’ll tell you a classic story about the typical Friday night. I went out with my friends, we had a couple of drinks (a bit too many), and went to a club. The place was nice and there was this one girl that really caught my eye. She was stunning and I couldn’t stop looking at her. After some casual staring and some extra shots with my friends, I finally found the courage to approach her. I started dancing with her and she actually started dancing ‘back’. So that went pretty well so far, but then the shots started doing their job and I got a little bit overconfident. Without even speaking a word with the girl, I went for Read more →
Many marketers focus primarily on the acquisition of customers and they often don’t worry about the ‘quality’ of a customer. As I will explain in a bit, the quality of a customer is way more important than many people think. To generate sustainable growth, you should consider the entire lifetime of a customer.
”For most marketers the job is done when a customer is in, for Growth marketers this is just the beginning”
The key here is, getting a customer is one part of the job, making them happy is even more important.
What makes a happy customer so much better than a non-happy customer?
Well, here are three reasons to get you started (besides that they’re more fun Read more →
Business try to make more money than they spend. More specifically, they try to get customers for less than they have to spend to acquire them. Sounds obvious, but for many businesses it’s hard to figure out how much they spend per customer. This spend is called the Customer Acquisition Cost and it’s closely linked to the LifeTime Value (LTV: click to read about that)
The LTV is the value that one customer brings (on average). If you know the LTV of your customers, you can estimate how much you will be able to spend to acquire new ones. This simplified equation describes that relation:
(Marginal)Profit = LTV - CAC
High-school math, just three terms, where we want the left Read more →
Calculating the lifetime value of your customers is an essential step in (data-driven) marketing.
Well, think of a toothbrush company that sells its toothbrushes at a price of 2 dollars. This particular company uses an entire sales team to cold call their customers and hard sell them the toothbrushes. You can imagine that you have to sell a lot of these toothbrushes to break even: pay for the training, the salaries and being able to pay your own salary. Pretty easy to see this doesn’t fit.
To put it simply
‘If you don’t know what you can spend, you can’t judge if campaigns are working or not, and thus you can’t scale’
It sounds a bit stupid, right?Read more →
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