Learn to Calculate Customer Acquisition Cost, Lifetime Value, and Why Businesses Behave the Way They Do.
About the Book
How do businesses sustainably grow?
Whether you're a startup founder trying to improve your odds of success, or a Fortune 100 businessperson looking for ways to optimize an already sustainable business, you will benefit from understanding the ways you acquire customers and generate revenue from them.
This book can help. We demonstrate methods to assess and calculate Customer Acquisition Costs (CAC), Lifetime Value (LTV), and more. Looking at 15 case studies from a wide range of business types, we also show how metrics can vary depending on situation and goals.
You will learn:
- Ways to calculate Customer Acquisition Cost and Lifetime Value with additions like customer segments, cohorts, retention, and more (and why they can be imperfect methods).
- How to manage the cost of growth along with potential value generated.
- The difference between growing and scaling a business.
- Why food delivery businesses with good unit economics shut down.
- The difference between taxi and rideshare business models.
- Why it made sense for data storage companies to launch too soon.
- How varied business types, including mobility, consumer packaged goods, organized crime, art, subscriptions, mattress stores, food delivery, and more thrive or struggle because of these metrics.
Written by Paul Orlando, who built and operated startup accelerators in Los Angeles, Hong Kong, and Rome, and who teaches at the University of Southern California, the book explains various approaches you can use in your own company as well as when you evaluate other businesses. The book is a direct, practical guide for startup founders, operators, and students of business.
I read this book to help me understand CAC, LTV, and how to calculate these. My biggest takeaway was to segment channels of acquisition that Paul so eloquently explained! He thoroughly went through terms and shared examples of how things can be calculated wrong. If you want to get into the marketing space, or have been confused by how others explain things, read this book! There are great business type case studies at the latter half of the book as well.
This is truly a comprehensive guide on how to quantify efficiency, scalability, and growth within a startup. It's the kind of book you should read if you don't want to make any unnecessary mistakes in your startup journey or if you simply want to learn about how startups operate. I've met many startups during my time at a venture fund, and most of them fall victim to the pitfalls Paul describes in this book- had they read this book, though things would be a lot different.
Rare combination of rigor in the concepts and easiness to read. I have been reading quite a few about this topic in the last few months. Most of what I've found stays in one of these extremes: 1) great articles that demand too much of a statistics background and 2) articles that are not very serious about the topic. This book is one of the only options that I've seen that are both serious and easy to read.
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