Delilah Saxena

Often considered an essential element of understanding your businesses profitability – working out costumer lifetime value (LTV) can offer a benchmark when assigning ad spends and target customer acquisition cost in digital marketing campaigns. Before measuring your customer lifetime it’s important to understand exactly what LTV is. Put simply, customer lifetime value is a metric …

How to Measure Customer Lifetime Value Read More »

Equity dilution occurs when a company (usually a startup) issues new shares to investors, which in turn decreases equity ownership for existing shareholders. With more shares in the hands of more people, each existing holder owns a smaller or diluted percentage of the business. Just as a drink becomes less concentrated when water is added, …

What Is Equity Dilution? Read More »

How To Prepare Your Business For Series A?Series A is undertaken for developing a scalable and sustainable business. Startups undertake series A for the purpose of financing and capital raising. Usually, it is the second stage of financing for startups.To prepare for the series, the following steps must be considered for a good outcome:Step 1: Write up a business plan, considering the financial forecasts grounded in the performance to date. This plan must be double-checked by any other founder of a startup, any investor, or accountant for the reason of checking numbers.Step 2: Search for a suitable investor for your business. An investor identified must be keen to invest in your company or industry type, having the necessary funds to invest at your required level of business.Step 3: Paperwork must be completed, related to the registration of the company, corporate structure, IP-related legal documents, liabilities of the company, shared ownership, and related to regulatory compliance. All these documents must be prepared for the purpose of due diligence for the investor.Step 4: Reach out to the investor for the purpose of initial meetings. This must be accomplished by providing an executive summary of the business to the investor. One thing to keep in mind is that emails based on persistent follow-ups may work out, but if one asks for warm introductions it is much better. It’s even better if one has created an investor network by this point, as generic emails won’t make a better pitch line to investors.Step 5: Narrow down the list of investors one wants for negotiation purposes. At least two should have options that are open, as it will help with comparing terms later on in selecting a more suitable optionStep 6: Engage with a venture capital lawyer. It is an important step, as they have the expertise you need to draw up contracts, make agreements for business valuation, negotiating i investment terms and setting up term sheets between both parties involvedBottom line: In preparing for series A, it should be kept in mind that as it is about the first time of developing a scalable business, one must have solid preparation of showing evidence about their attitude of task-oriented behavior, as well as the facts and figures to help reflect growth potential for investment return. This will all help in influencing the investor in funding your business.

Investors play the role of pillars for a business start-up. There are many investors available in the start-up business market. All of them have different terms, policies, and investment criteria. Before dealing with any investor, you must know about all their capital rules and expectations they have for your business. Here are some ways you can get a loyal investor:Venture CapitalistsVenture capitalists are investors who provide private money to raise a business. Venture capitalists are not part of any investment organization or providing investment through a partnership. They have their own money to invest in the start-up business, and in-return they just lend you money and in-return get a profit, according to the predefined rules. You can easily contact any venture capitalist around you. Some websites provide the facility to ask for investment from these investors. Also, you can use social media platforms to find them. And if they will consider your business profitable for investment then they would like to invest.Online platformsThere are many online fundraising platforms through which you can get money for investment. These platforms offer loans for business or donations. Some of the popular platforms is SeedInvest, StartEngine, and CircleUp, etc. You can get loans from such platforms, and you can monthly pay them some profit as a capital.Social MediaSocial media has now become a great source of business advertisement. You can share posts about your business and products. Through this people will get a chance to know more about your business. In this way, you can contact your social media friends for investment. The more they would know about your business, the more they will trust you for investment.Business planBefore investing in a new business, investors check the business plan. If investors would find your business plan interesting, then they will surely invest in your business. Your business plan should be strong enough that investors do not doubt the loss of their investment.Tip: investors like to invest in businesses that have more chances of profit, therefore it is vital that your business is somewhat high in market demand.Equity FinancingEquity financing is an investment method, where a person invests in your business for a share in the business. You can easily access equity investors online or from your friends and family. This investment method can be an effective way to enhance your business.Choose investors and an investment method carefully, because if you want to do a partnership with any investor, there are different rules to be followed and they will get profits according to the shares they have in your business. However, if you want to be the only owner of the business, then avoid investors who look for a partnership, i.e., venture capitalization and equity financing are not suitable.

Customer Acquisition Cost (CAC) is the cost of acquiring a customer to purchase products. It works along with the Customer Lifetime Value (CLV). CAC is an important term for growth businesses.If a company knows the cost of bringing a customer on, it can get a clear vision of its capital requirements in reaching a specific level of growth. It is the total spend on digital marketing and other direct costs which the company has deployed to attract customers.It is a simple measure which can tell us a lot about the performance and return of investment. Once you have some parameters between which the company oscillates on a regular basis, it is easy to interpret. If the CAC is increasing, then it means that you are getting worse results flowing from the marketing efforts. It may be that a specific campaign does not resonate with the target audience or maybe it is becoming increasingly competitive to position the company through specific digital channels. It may be time to consider alternative channels, maybe a different messaging campaign.What if the CAC is decreasing?It might be a temporary advantage, a great campaign or a message that really draws the customer to your website, to your product.In time such efficiencies tend to disappear, due to competitive pressures and of new similar products in the marketplace.How to measure your CAC?If you want to measure the actual cost of customer acquisition then you must know about its formula. The formula of the customer acquisition cost is as follows:Customer Acquisition Cost = ???????????????? ???????? ???????????????????? + ???????????????? ???????? ????????????????????????????????????÷ ???????????? ???????????????????????????????? ????????????????????????????????CAC is the sum of the cost of sales and marketing per new customer acquired.What elements are considered or should be considered in CAC? Here is a list of potential elements which you may want to consider:· The total cost that you are spending on digital marketing· Total salaries that you are paying to your employees directly involved in sales and marketing activities, usually only those who have acquisition quotas· The total cost that you are spending on creating content· Publishing cost that you spent to publish your ads on TV, newspaper (above the line marketing)· The cost spent for the maintenance and software updating if used anyExampleHere is an example is given through which you can easily understand the concept of measuring Customer Acquisition Costs.If you are running a clothing brand and the total cost of sale is £400,000 and the cost of marketing is £300,000, across multiple social media channels. In the same period you gained 1000 additional customers then the total CAC can be calculated as:Customer Acquisition Cost = ???????????????? ???????? ???????????????????? + ???????????????? ???????? ???????????????????????????????????? ???????????? ???????????????????????????????? ÷ New Customers ????????????????????????????????Customer Acquisition Cost= £400,000 +£300,000 ÷ 1000Customer Acquisition Cost = £700Why Measure your CAC?By measuring CAC, you can easily understand any trends or pattens in your business you may want to profit from or protect against. Measuring dynamically, month on month is essential, always recalibrating with new types of expenses or systems you are using to reach your customer.There is an optimal level where you are able to predict and finance growth. It takes many optimisation exercises and practice to assess the best point to be more aggressive in the market and not waste your capital.

When an existing customer makes a purchase again, this is called repeat purchase, and retaining these existing customers is less expensive than acquiring new customers. Several reports have also shown that existing customers make a promising profit to a seller in comparison to new customers. To inspire a customer for making its second or third purchase, several strategies can be opted by businesses:Engaging customers post-purchase by targeted messaging is equally important for repeat buying behavior. Usually, brands cease their targeted messaging activities after the initial purchase is made which makes a negative impression in the mind of consumers. These targeted messages can be sent using emails, in-app notifications, and pop-ups, and so on.Different patterns in buying behavior and intent of customers can be observed at different stages of the purchase. For instance, in the case of replenishable items, it is important for businesses to use their marketing automation strategies in real-time. By sending relevant reminders on time can re-engage customers in making their purchases.An effective strategy can be the use of promo codes, discounts, and coupons. Rewarding customers on their purchases encourages them to make their purchases again from the same seller. For this strategy, one should also have a solid strategy for promotional events behind such incentive programs because too much use of such programs can spoil the purpose by creating a negative brand perception that will ultimately result in a loss of revenue.Advertising your stuff for customers who visit your site without making a purchase can bring them back for purchasing action. This is done through the use of a code snippet to see a customer’s interests. Now the customer’s preferences and interests can be noted by the content they watch on social media. Catching the customers through their content searching can make a seller or brand identify their target customers more easily to provide them with the right advertising content to motivate them for purchases.Also, loyalty programs make customers loyal to their specific brand or seller. The gamified points system, discounts, and offering early access to your new products and services can also make customers coming back to the same store. This is especially an effective strategy in the case of replenishable goods.