Customer life time value

...or why nobody is paying for an address list

Time and time again entrepreneurs selling their businesses wonder why their customer base is not figured in the valuation equation. It is all about customer attrition rate (or the 1-Retention rate, if you will). Most of the cases there are no statistics available to proof, what the balance is of acquisition cost and the life time value of a customer is. So back to the good old industry multiples or a DCF that will be challenged by the acquirer on all these assumptions. Please read an article by Venture capitalist David Skok, explaining the relationships.

for entrepreneurs

I recently stumbled over an old video.

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”

— Samuel Beckett

 

Only to realize that Discovery Driven Planning, a 30 plus some years old technique, has not made it to the corporate portfolio of techniques. We are so much in using this with our clients that we barely think of approaching innovations, new business carve outs or start-ups in any other way. Admittedly it requires great discipline and probably always an outside moderator to bring the team on track, but it works. Beside the reverse income statement that gives a different perspective, the milestone map organized around the assumption that turns into facts is a very powerful tool. Keep on learning. But make sure you don't end up in the Flop Files.

Being an ant …

Have you ever asked yourself, why are we working together?

It is pure physics! Have a look what is possible today, as scientist mimic ants. And what will be the next step? Does this harm your business in the future? Or do you all of a sudden see new horizons?