Make your startup fundable with profitable customer acquisition

  • Who are your buyers?
  • Where can you find them?
  • How much does it cost to turn them into customers?
  • Which pipeline activities are working for you?
  • Most importantly: is your customer acquisition process anywhere near profitable?

Why traction matters

  • Yousician: Yousician is an interactive, educational music service that makes it easy to learn to play an instrument. When I built the company’s early customer acquisition model, it was profitable based on a daily budget of $1000.
  • Freska: Freska offers flexible, high-quality home cleaning services. When I built Freska’s early customer acquisition model, achieving profitability was more challenging because we had a massive monthly scaling budget of €100,000 per country. Still, we made CAC profitable by understanding exactly what was driving it.

Making CAC profitable for uour startup

  • Pipeline visibility
  • Iteration of your customer persona
  • Building organic online visibility
  • Reviewing your CAC calculations regularly

1. Pipeline visibility

  • Conversions per channel: learn which channels perform well for your business
  • Total conversions: this involves adding up all of the results from above. A well-functioning customer relationship management (CRM) tool should make this easy
  • CAC per channel: this figure will allow you to see which channels are not only delivering customers but also clarify at which cost these acquisitions come
  • Blended CAC including all of your startup’s costs
  • Costs broken down by channel
  • Total costs to your startup, including salaries, outsourcing, advertising and marketing costs, tools, subscriptions, and any other costs. Analyzing this regularly can lead to surprising discoveries.

2. Iterating your Ideal Customer Persona

  • Do you want to know which search terms your customers Google when they look for your services? Ask them.
  • Do you know which social media platforms your customers prefer? You need to answer that question before starting a social media advertising campaign. Where do you find the information? The answer is simple — ask them.
  • Do you have a hard time understanding why your potential customers are not buying? Ask them. Perhaps your lack of conversions is down to a lack of trust. This happened to me in a previous job. Understanding the problem helped us find a solution that allowed the company to grow exponentially.

3. Build organic online visibility now

4. Sanity-check your CAC calculations

Final thoughts

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