Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Consumer traction

X
Hey guys,

Does anyone have insight into the range of %s that demonstrate "good" traction for a consumer product? I.e., you want 50-60% of your customers to be repeat-ordering (at the appropriate intervals) at least X times? I know it's product specific but I've heard vastly different numbers, so would love to hear your opinions. LTV is obviously important, but those numbers can be hard to discern when still figuring out pricing structure, etc.

Thanks so much in advance and hope everyone is having a great weekend.
Christina

3 Replies

Jonathan O'Shaughnessy
1
0
Jonathan O'Shaughnessy Entrepreneur
Hi Christina,

Great question. Hope you're having a good weekend too.

First, what business are you in? I think it's hard to say given whatever industry you're in. It could vary substantially (i.e. 10% re-order in one industry could be amazing in one industry, and horrible in another).

One way we used to think of it in the investment world was to evaluate a very simple formula:

CAC vs LTV. (CAC = Customer Acquisition Cost and LTV = Lifetime value for others who are reading).

In other words, how much does it cost you to get a customer at scale versus the value of that customer/user over their lifetime. Sometimes you plan on having only one interaction with a customer (say a wedding band retailer), or sometimes many - say with SaaS products. I guess my point is if you keep going back to CAC vs LTV, then it doesn't really matter. For instance one interaction at $100 of profit is the same as 10 interactions at $10. If you know your LTV is 2x your CAC, than you have a very good business.

I know it's hard to get a good idea on those numbers when you're early. But you can blend assumptions and real data. I.e. you know a customers first purchase = $10 profit, but you don't know how many purchases they'll make... you can fill in assumptions to guesstimate that amount and then compare it with how much it cost you to get them. If you're using totally free sources of customer acquisition (social media, PR), then try a few "test" buys using straight advertising... say $500 of Adwords to get an idea of how much it would cost you to simply buy that customer. That will give you a rough range of CAC.

Hope that is helpful! Love to tlak it out more if you want.

Also, if anyone is interested, I'm looking for alpha testers for a new design-your-own jewelry app. Let me know at [removed to protect privacy]

Thanks!

Jon
Craig Green
0
0
Craig Green Entrepreneur
E-commerce Consultant
That really depends on the category. LTV is the way to think about it, vs. cost of customer acq. I have two clients - one where there's just one purchase over a year, and another that requires repeat purchases to come whole. It depends on ticket size, cost of acq., etc. Craig Green [removed to protect privacy](c)
Ron Levi
0
0
Ron Levi Entrepreneur
Senior Director, New Products at Ask.com
Read these:


https://www.medium.com/what-i-learned-building/ab24a585b5ea

~R










0
0
X
Entrepreneur
Thanks so much, everyone! Really, really appreciate it. Jonathan, we're in the consumer-tech/food space. I guess my main question is whether traction truly only matters in terms of LTV and COCA or if there's more implied meaning around how good your product is if/when you have a user drop off after using it a few times. Sure, we may recoup the COCA and then some, but we'll still need to explain the drop-off to investors; at what % is drop-off typical vs. cause for concern? And I'm more than happy to try out your design-your-own-jewelry app!
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?