One needs to consider the value of one customer to know how much effort they can invest in acquiring this customer.
This ties in together with the acquisition of a customer through marketing, especially the paid growth engine.
If the price is too high to acquire a customer, through effort or paying, you would essentially lose money which is not a good ustainable business model.
Potential values
- Sale of product
- Average ‘lifetime’ subscription per user
- Marketing value through referrals
Reference
Thiel, Peter, and Blake Masters. Zero to One: Notes on Startups, or How to Build the Future. Virgin Books, 2014.
Highlights or timestamps
To leverage your distribution, you always need to consider the potential of each client before deciding how much effort you’re willing to put into making the sale. For example, the author co-founded the data analytics company Palantir, where a single closed sale brings in several million dollars. Here the CEO has to personally do the selling, because clients spending such sums expect personal involvement from the seller’s executives.
— ^89f205 from Zero to One