09.6 · Capability in Distribution

Growth economics

The numbers that decide whether growth is sustainable: what it costs to win a customer and what that customer is worth.

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09.6.1Customer acquisition costWhat it costs on average to win one new customer.
09.6.2Conversion efficiencyHow well each stage turns prospects into customers.
09.6.3AttributionWorking out which channels and touches led to a customer.
09.6.4Channel performanceComparing channels on cost, volume and quality of users.
09.6.5Payback and sustainable growthGrowing at a pace the business can fund and keep.

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Where to start

3 resources

articleStart here
16 startup metrics ↗
Andreessen Horowitz · 2015 · 18 min
Clear definitions of the business metrics investors ask about, such as bookings, recurring revenue and lifetime value.
articleStart here
Four fits for $100M+ growth ↗
Brian Balfour · 10 min
Market, product, channel and business model have to fit each other; a great product with the wrong channel stalls.
articleGo deeper
SaaS Metrics 2.0: a guide to measuring and improving what matters ↗
David Skok · 2013 · 35 min
The standard long-form reference for MRR, churn, LTV and CAC, with the formulas and the reasoning behind them.

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