Key Metrics For New Enterprises - Whiteboard Wednesday

Localytics Co-Founder and CEO, Raj Aggarwal, discusses the key metrics that empower new and existing businesses to chart and display operational performance over time.



Hi. I’m Raj Aggarwal, Co-Founder and CEO, of Localytics. Thanks for joining us for this latest edition of Whiteboard Wednesday. One of the questions that I get asked a lot about is what metrics should you be tracking in your business? There’s no straight answer to this. It depends so much on the type of business that you are, the stage that you’re at, and a number of other factors; however, there are another couple of key concepts that any business particularly early-stage businesses should have a firm grasp of, and this will help you understand both the dynamics of your own business and your own profitability, and then be able to relate this, and discuss this, articulate this better to investors.


Measuring Lifetime Value and Customer Acquisition Costs

So these concepts include Lifetime Value which is basically the revenues that you’re gaining from your customers per month multiplied by the lifetime of those customers helps you understand how valuable your customers are. There’s another concept which is the acquisition cost of those customers so Customer Acquisition Costs, and this is a concept that is fairly well understood and easy to measure in the web; however, in mobile things become a lot more complicated partly because the app stores often don’t pass information from ad networks and other acquisition sources to your analytics to help you relate Lifetime Value to acquisition.


Track The Right Sources Of Value

Localytics, in partnership with ad networks and others, helps you connect these two pieces so that you can understand well based on what ad networks I’m putting my dollars into and what campaigns I’m spending money on, what is the Lifetime Value of customers from different sources? And then you can leverage this information to make sure that you’re spending the most money in sources and campaigns that are driving the highest value to users.


Using Metrics To Power Your Enterprise's Future

Ultimately having an understanding of these two concepts will help you understand things like well how many months does it take to recover my Customer Acquisition Cost? And, again, having a deep understanding of these types of concepts will be helpful to understand both the dynamics of your own business, and to be able to clearly articulate these dynamics to potential investors and other potential stakeholders. This has been the latest edition of Whiteboard Wednesday. Thank you for listening and we look forward to seeing you next time.


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