Growth / Traffic
Chases measurable growth through acquisition and conversion experiments.
Essential vocabulary
CAC
Customer Acquisition Cost
How much it costs, on average, to win a new customer.
CAC also shows up in
Compared to LTV to find out whether the business model is sustainable in the long run.
Used to evaluate whether it's worth investing more in a specific prospecting channel.
Conversion funnel
The stages someone goes through from first learning about something to actually buying or using it.
Conversion funnel also shows up in
Used to understand at which onboarding step users abandon the product.
Represents the stages of a negotiation, from first contact to signed contract.
LTV
Lifetime Value
How much revenue (or profit) a customer generates during the entire time they stay a customer.
LTV also shows up in
Used in recurring revenue projections and to justify investment in retention.
Guides retention decisions: features that increase usage time increase LTV.
Churn
Cancellation / drop-off rate
The share of customers (or revenue) that leave the company in a given period.
Churn also shows up in
Analyzed through usage behavior to spot signs a customer is about to cancel before they actually do.
Used to project future revenue and to calculate the real LTV of the customer base.
ROI
Return on Investment
How much money came back relative to what was invested, as a percentage.
ROI also shows up in
Used to justify investing in a new tool, hire, or sales campaign.
Used to prioritize which features are worth building first, comparing team effort against expected impact.
Good to know too
NPS
Net Promoter Score
A score from 0 to 10 that measures how likely customers are to recommend the company/product to someone else.
NPS also shows up in
Promoter customers become a source of referrals and sales case studies.
Promoters are invited to leave public testimonials and reviews.
Persona
A semi-fictional profile that represents a real type of customer, used to guide decisions.
Persona also shows up in
Used to prioritize features by thinking about the needs of a specific user profile.
Used to adapt the sales pitch to different buyer profiles.