UAL — The flow of attracted Users for the mixed model. These Users convert not to customers but to leads that we sell our clients.
CL — Index of conversion from User to lead.
L — The number of leads we sell.
SP — Price for the lead sale.
NS — Number of sale shows how many times we can sell a lead. In some models you can sell one lead to different clients and earn more money.
APCL — Average number of requests for service made by one lead.
CPAL — Expenses we bear for the User that we are going to convert to lead.
ACL — Marketing budget spent on attracting Users who will be converted to leads.
IR — The percentage of bought out leads. In some cases we cannot sell all the leads that we got.
read more...UA — User acquisition. The number of Users we acquired. It shows how many Users learned about our product through different marketing strategies. For example, how many visitors came to the site through the search engine advertising or how many companies we contacted by the cold calling.
read more...C1 — Conversion to first purchase. Index of conversion from User to Buyer. First purchase separates Users who just came to the site from Users who made a purchase and became Buyers.
read more...B — Buyer is a customer and also the number of customers we get from the User flow with our conversion index. B = UA × C1.
read more...iCount — Number of goods in the basket. Some business models, like an ordinary shop, let customers buy several goods at a time. iCount shows the average number of goods in your customer’s basket.
iPrice — Average price for goods in the basket.
Av.Price — Average price. The sum of money our customer paid for our goods or services.
COGSL — Expenses we bear for getting leads that our client buys.
read more...COGS — Cost of goods sold is an important value. It shows our costs for every sale. It is very important to differ regular expenses we bear whether we have customers or not from nondiscretionary expenses for every sale. For example, if we sale some goods, COGS will include the money we spent to buy them. For b2b sales COGS may include the bonus that we pay our sales manager for every sale.
COGS,% — Share of expenses you bear for selling your goods that depends on their price, for example, the bank fee for online payments.
COGS,fix — Share of expenses you bear for selling your goods that doesn’t depend on their price, for example, the cost of the goods you sell.
read more...1sCOGS — First sale COGS. Additional costs for the first sale. It is important to understand that these additional costs should be added to COGS. The additional costs are, for example, expenses for pilot launches and integrations for corporate clients, or an extra fee for our sales agent.
read more...APC — Average Payment Count. Average number of payments made by one customer during a set period of time. APC by default is counted for the whole life period. This value should be calculated carefully. It should never be rounded up.
read more...CLTV — Customer Lifetime Value shows how much we get from sales to one customer during a set period of time. It doesn’t include the marketing cost. CLTV is determined by the formula CLTV = (AvP — COGS) × APC — 1sCOGS the noun for the so-called Krasinsky formula. CLTV is an important value for business effectiveness estimation. By comparing it to CAC we can measure the return on marketing investments.
read more...LTV — Lifetime Value shows how much we gain from each User. It doesn’t include the marketing cost. LTV is determined by the formula LTV = CLTV × C1. LTV is an important value for business efficiency estimation. By comparing it to CPA we can measure the return on marketing investments.
read more...CPA — Cost per acquisition of one User. It is determined by dividing the entire marketing budget by the number of all Users. Unlike CAC, CPA is an actionable metric. It doesn’t depend on other metrics, such as conversion or User flow.
CAC — Customer acquisition cost shows how much we spent on getting the customer. For example, we can divide the marketing budget by the number of customers we attracted.
AC — Marketing cost. All the expenses spent on the User flow acquisition.
read more...CM — Contribution margin we get from our User flow. It shows whether we sell our goods and services well or not. It is the basic value that determines the effectiveness of our decisions. It is determined by the formula CM = UA × (LTV — CPA) = UA × (CLTV × C1 — CPA).
Revenue — Return on sales of goods and services. It is determined by the formula Revenue = B × AvP × APC
read more...Return on marketing investment — is the contribution to profit attributable to marketing (net of marketing spending), divided by the marketing 'invested' or risked. ROMI is not like the other 'return-on-investment' (ROI) metrics because marketing is not the same kind of investment. Instead of money that is 'tied' up in plants and inventories (often considered capital expenditure or CAPEX), marketing funds are typically 'risked'. Marketing spending is typically expensed in the current period (operational expenditure or OPEX).
read more...Gross profit margin — is the difference between revenue and cost of goods sold (COGS) divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (e.g. production or acquisition costs, not including indirect fixed costs like office expenses, rent, or administrative costs). Gross Margin is often used interchangeably with Gross Profit, but the terms are different. When speaking about a monetary amount, it is technically correct to use the term Gross Profit; when referring to a percentage or ratio, it is correct to use Gross Margin. In other words, Gross Margin is a percentage value, while Gross Profit is a monetary value.
COGStotal — Total COGS is calculated as sum of all COGS from all transaction and all 1sCOGS.
CPAmax — the maximum allowable CPA value based on CLTV/CAC ration 3 or more
read more...ARPC/CAC — CLTV to CAC or the Customer Lifetime Value to Customer Acquisition Ratio (CLTV:CAC) measures the relationship between the lifetime value of a customer and the cost of acquiring that customer. This is a particularly crucial measure for subscription based companies.