Now if you remember we started here on the left. We didn't earn and paid media.

In customer relationships all the get keep grow metrics, some of which we talked about, some of which you'll discover, what were the customer acquistion costs?

So one of the interesting equations for every startup is that

That was the customer acquisition cost, CAC, here.

So in our last lectures we talked about value proposition, customer segments, distribution channels, customer relationships get, keeping and growing customers.

If you have world's most perfect business model, investors would love to see this number much bigger than this number and so what you want to look for is a well balanced model that takes into account how much you need to acquire customers but how much ultimately you'll extract from them over the lifetime.

He has managed to secure several accounts.

Let's take a look at now the web mobile funnel.

look like. What is it that you are doing.

Well getting customers is just like it sounds.

And referrals basically generates this outer viral loop.

As was simulated, the value proposition includes all the features of your product but also the pains and gains you're solving for the customer segment and that's where the market goes.

Now let's go to month 3.

Then as we talked about earlier, how much will it cost to acquire a customer?

But because I had to cut lawns all summer for all of our neighbors and get paid to do that,

If in fact, your conversion rate between acquisition activation could be increased.

If we now do the math, we can now see it cost me 100 to acquire one paying customer.

Seems intuitively obvious but what you want to make sure is the amount of money you're collecting over here is bigger than the customer acquisition cost to remember the amount of money you're spending from here to here.

By now, you're intimately familiar with the business model canvass.

And in value proposition, the goal of this is to find out that minimum viable product.

He cheated his clients out of a lot of money.

So on day one, these were their initial hypothesis coming into the class.

We talked about value proposition, we talked about customer segments, we talked about channels, but today we're going to focus on customer relationships.

Month two, you get 400 from the customer in the previous month

Well, hopefully it gets kind of fun because the real metric the way we kind of measure things, the language we use on the web is customer acquisition cost.

The answer is product market fit finding the right balance between the minimum level of viable product and the customer archetypes.

I want to know what the driver is.

Why would they do this? 'Cos they were going to lose 31 a year?

So we've done no catering this month but we've gotten a lot of money

And so they figure out how to sell existing customers more products.

First one is we got to acquire customers and then we activate them.

Now we finally come to the last part of the business model canvas.

But for you to be a successful company and actually thinking about how much you could spend on them over here, you need to understand can I get them to spend more and more over time and how to keep them

Instead of pricing based on cost,

Many companies have huge databases of customer information.

So in the last lecture, you remember the business model canvas, all the 9 components of a startup.

They could tell you that I want bigger, faster, cheaper status quo.

You cater an event where the cost to you was 200

I have no idea where my husband is.

Let's take a look.

Is it about time saved? New efficiency created?

And they love to tell you, Oh, it's about 10 percent, proudly.

Why do you want to think about keeping customers is that customers are a lot more expensive to acquire over here than they are to keep.

Let's just take a look at quickly a web example in getting customers, you're going to be o worrying about how do I acquire them that is how do I get them even to my website, how do I activate them that is how do I make them do something, and then later on we'll see after I got them how do I keep them around that is how do I not lose them through attrition and churn and then what can I do once I have customers to make them spend more money or use my product even more.

Another key component of understanding customers is understanding customer gains, which is a fancy way for saying what are the benefits that customers expect, or desires, so besides the jobs they want to get done what do they want to gain by using your product or service?