We are continuing our mini-series of crucial metrics for growth companies using Netflix as an in-depth real-world example. Last time, I covered the crucial metric Contribution Margin that guides Netflix’ decision making on content investment on a macro level.
Today, we are going to look at a number of metrics that are being used in the context of assessing companies’ growth potential:
CAC: Customer Acquisition Cost
CLV (or LTV): Customer LifeTime Value
ARPU: Average Revenue per User
The important ratio of LTV/CAC
Profit per user
These metrics are helpful in the context of repeat users within the subscription business model but also the platform business model (e.g. Uber, Airbnb, TripAdvisor, Facebook, etc) which I have covered in extensive detail under those links.
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