Retaining customers<\/li>\n<\/ul>\n\n\n\nAcquiring customers<\/h2>\n\n\n\n Customer acquisition concerns the cost to your startup of gaining new customers. What is the mix of tools and media that you need for this? Customer acquisition cost includes every amount expended to bring new customers to your product or service, divided by the amount of customers that you have.<\/p>\n\n\n\n
Acquisition costs will vary depending on whether you\u2019re a B2B or B2C company. B2B companies tend to have a longer sales cycle, facing multiple stakeholders. In contrast, B2C companies spend heavily on social media marketing to reach consumers directly. Establishing a cohesive narrative and consistent messaging across all media will help reduce your acquisition costs. Find where your customers are and reach them there. Develop an integrated marketing strategy to maximize your messaging.<\/p>\n\n\n\n
Activating customers<\/h2>\n\n\n\n Bringing new customers to your company is only the first part. You need to convert them into users or purchasers of your products and services. You need to convince them of the advantages of your offering over your competitors\u2019. The best way to do this is to define what being a daily active user (DAU) means for your business. For example, for Microsoft Teams, we define DAU as \u201cthe maximum daily users performing an intentional action in the last 28-day period across the desktop client, mobile client and web client.\u201d<\/p>\n\n\n\n
This is a key metric for you to establish and then benchmark repeatedly as it will help you understand the goals you have for your customers which will serve them but also maintain your business. You will want to look at every landing page you have and determine whether it is doing its job correctly and driving customers through a conversion funnel effectively.<\/p>\n\n\n\n
Retaining customers<\/h2>\n\n\n\n Retaining customers is the metric you should use to determine whether customers are willing to repeat the intended action on your platform. Do customers return and how engaged are they with your product or service?<\/p>\n\n\n\n
Part of your ability to retain customers will arise from the experience they had the first time they used your service or purchased from you. Your goal should be to reduce friction for new users whether it\u2019s in opening a new account, creating a new profile, or accessing your service. If something prevents users from completing an action they will bounce from your site and probably not return.<\/p>\n\n\n\n
Retention rates will fluctuate as you test out different features and approaches. At first you will see high take up at product launch followed by a dip as users drift away. As you iterate towards product market fit, your users will become more loyal and retention will increase again. Tracking retention over time often creates a \u201csmile\u201d effect in your graph as you achieve product market fit.<\/p>\n\n\n\n <\/figure>\n\n\n\n<\/p>\n\n\n\n
When you have a handle on customer retention you can really start to measure your net growth by using the quick ratio. This is a popular metric from the SaaS world for comparing the number of new and returning users to the number of lost users in any given month. A returning or resurrected customer is one that didn\u2019t make a purchase in the previous month but had purchased at some earlier time. It\u2019s important to distinguish between new customers and returning customers to measure the cost of acquisition more accurately.<\/p>\n\n\n\n
Measuring lost customers or your company\u2019s churn rate is also key to understanding your position in the market and where you need to place your focus.<\/p>\n\n\n\n
There are many tools for calculating your quick ratio as a daily metric, but the simplest may be Excel. It will help you understand how you are growing over time and how the decisions you make are impacting your business.<\/p>\n\n\n\n
Mariano Amartino is Microsoft Startups Director for the Americas. Previously Mariano was founder and CEO of Hipertextual helping it become one of the leading blog networks in the Spanish language.<\/em><\/p>\n\n\n\nTo learn more about Microsoft for Startup Founders Hub<\/a>, currently available in limited preview, visit us here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Only when you start to account for net growth and product market fit will you start to understand whether or not you have a sustainable product or startup.<\/p>\n","protected":false},"author":1,"featured_media":761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ms_queue_id":[],"ep_exclude_from_search":false,"_classifai_error":"","_classifai_text_to_speech_error":"","_alt_title":"","ms-ems-related-posts":[],"footnotes":""},"post_tag":[],"content-type":[15],"job-role":[],"topic":[],"coauthors":[510,511,512,489,509],"class_list":["post-215","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","content-type-events-and-community-engagement"],"yoast_head":"\n
Real Customer Metrics for Your Startups<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n