Startups are a great way to establish yourself in the market and gain brand name. But other than profit and reputation there are some other key factors that you should pay close attention to so that later you do not face any hassle.
Only concerning yourself about revenue and profit would not help you stay afloat or remain above others in the business for the long run. What you must do is take a more in-depth look into the performance and the financial metric of your team. Check your corporation so that later you do not face any pitfalls and can avoid it at any cost. What are the factors that you should bear in mind regarding tech support for startups in Toronto?
Customer Acquisition Cost:
When you are trying to establish your name in the business world, one of the key factors that play a great role in business is getting new customers. And you must always have a budget for acquiring a new customer through various advertising and marketing strategies.
The easiest way by which you would be able to calculate the CAC (Customer Acquisition Cost) would be to pick a specific period and divide the cost during that period with the marketing and the sales by the number of customers or clients that you have gained in that period.
This clearly shows that the lower you spend on your customers, the lower the customer acquisition cost is, the better it is. A rising in the calculation of the cost of CAC would mean that you are facing problems and you should start looking for solutions before it overcomes profit and starts depreciating.
This is also known as the retention rate and one of the key factors of tech support for startups in Toronto that you should keep in mind. They are the calculation of the number of customers who are staying with you and also the number of customers who are leaving you in that given or a particular period.
There is a specific formula buy which you calculate. The main goal of this calculation is to keep your retention rate as high as possible.
Customer Lifetime Revenue:
After the last two factors, another factor that you should keep a close eye to is the customer lifetime revenue. This is the revenue that you receive with a repeated number of customers.
When you have an idea regarding your CLR (Customer Lifetime Revenue), then you could quickly determine how much to spend for CAC. The more you receive the revenue, or the higher is the CLR, the more would you be able to spend on CAC.
Customer lifetime revenue also gives you an idea regarding the quality of the customer and how you could improve it if necessary. You also find out the reason why customers are leaving, whether it is the product or the service, and you could take steps accordingly.
Thus, these are some of the things that you should keep in mind if you want to stay ahead in the competition and understand the margin and profit of your business.