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This is of course a good explanation, but I'm actually just curious about the _magnitude_ of the actual numbers here, and across other industries.
by Mizza 9y ago
This is of course a good explanation, but I'm actually just curious about the _magnitude_ of the actual numbers here, and across other industries.
- 55555 9y agoAffiliate networks will tell you what companies are willing to really pay for a lead, customer, etc. You really need to know BA's churn and LCV etc., though. Nutrisystem pays $140 to affiliates per new customer and gets about $12 in revenue daily from the customer. That is sort of relevant. I wouldn't personally put any money into Blue Apron. They are hiding their churn and dressing up their numbers. I suspect they will blow up or fizzle out.
- eldavido 9y agoAre they? What would "not hiding" it look like, a clear statement of it in their S-1, of the form "X is our churn rate?" I'm just not sure what people want. They show cohorts and give a lot of data on aggregate performance, but I agree, the lack of clarity is a bit alarming. Is there some kind of precedent people are comparing this to, a membership-style S-1 with clearer statement of what's going on?
- rhizome 9y agoWhat would "not hiding" it look like I'm guessing it would take the form of higher prices.
- ethanhunt_ 9y agoNot sure if LTV for blue apron is in their IPO docs or not, but to put that number into perspective: their cheapest plan is $60 per week, so if they hold onto a customer for 6 months, that $1560. 20% profit margin would mean $312. No idea if those numbers are anywhere close to correct. The magnitude of CAC and LTV are only meaningful together. A ferrari dealership might have a $5000 cost to acquire a customer and that would be a bargain, because their LTV is $250k+.
- deleted 9y ago[deleted]
- hkmurakami 9y agoQ - shouldn't CAC be balanced with Gross lifetime profit, not lifetime revenue per user?
- tedmiston 9y agoNot sure if I'm the average meal kit customer, but I don't choose to receive them every week. More like once every 2-3 weeks. Just something to consider in a customer's LTV.
- ghaff 9y agoAccording to their S-1, it seems as if their typical customer does indeed place an order pretty much every week. That certainly wouldn't be me. But, then, I think about using some of these services from time to time--but almost always end up driving to the store and picking up my own ingredients.