Chad Varra, CFO of SendGrid, leads a discussion with members of the Boulder and Denver Software Clubs. These slides show some of the numbers and concepts to which Chad spoke.
8. Customer Count JanuaryFebruary Beg Customer Count 5,000 5,130 New Customers 150 200 Lost Customers _(20)_ _(25) Ending Customer Count 5,130 5,305 Increase Customers 75 75 Decrease Customers (10) (10)
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10. Customer Acquisition Cost (CAC) What does it cost to acquire a customer? How many months of MRR does it take to recover your costs of acquiring that customer?
12. How long does it take to recover the CAC? Payback Period = CAC/MRR per Customer Average MRR Per Customer = $100 $416/$100 = 4.16 months Rule of thumb: 12 months or less is good.
13. Lifetime Value of Customer (Average Lifetime of a Customer * MRR/Cust) - Cost of Revenue - CAC = Lifetime Value of Customer Lifetime of Customer = 36 mths 24 mths MRR per Customer = $100 $100 Margin = 80% 80% CAC = $416 (4.16 mth payback) $1,600 (16 mth payback) (36*$100)-$720-$416 = $2,464 (24*$100)-$480-$1,600 = $320 Rule of thumb: LTV that is greater than 3x CAC is good