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?

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

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.

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

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.

So one of the interesting equations for every startup is that

That was the customer acquisition cost, CAC, here.

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.

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

I want to know what the driver is.

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

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.

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

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.

If you could do in physical channels, telesales or inside sales versus having a direct sales force,

The answers are get, keep, and grow are the three parts of customer relationships.

And so let's look at both of these get, keep and grow for physical and web mobile channels in a little more detail.

I want to use and on the web, I might be paying Google forever.

So what are some of the balancing acts?

Let's do an exercise and see what it feels like and how does it work to get an activated customer and how much it cost.

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

Today, we're going to be talking about customer relationships.

How much did it cost them to take a test drive of your car or fly your airline?

Keep just like it sounds.

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.

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

Even though on day 1 you're not thinking about keeping customers because you're desperately worried about getting them, just understand the next thing you're going to be doing is worrying about how to keep your most valuable customer.

He might have only used it two or three or four times. and you don't have the customer acquisition cost because you already acquired that customer.

What you need to do is have an opinion based on some fact that gets refined.

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

A start up is a temporary organization and what are you suppose to be doing?

Customer relationships is kind of a fourth piece, and customer relationship has a really interesting interaction with these other three pieces.

In a non perfect world, you might just be a user and I'm going to monetize you by getting pairs to pay for the fact that I have lots of users, but acquisition that is acquire, and activation is a 2 parts strategy.

And now they started to get a better understanding of what customer relationships were, about getting customers, keeping them and growing them.

Let's just take a look again if there's activities.

And one of the things we need to understand is what's the archetype or the persona of our customers that we're actually wanting to get and so one of the things that's kind of hard for startups is to realize that getting customers isn't some abstract idea you really need to understand who your customers are and this is not just thinking about selling to consumers.

And again, are you getting a viral loop and referral loop from happy and satisfied customers telling others word of mouth and so this is a balancing game, and for first time entrepreneurs who are focused here, it's really important to think about customer acquisition cost and a lifetime value.

Because if you think about it, you've been working hard on value prop, and you've been working hard on customer segments and customer acquisition and activation and channel.

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.

If you remember, we understood who the customer archetype was with running search engine marketing or search engine optimization, but in the web, we just really have to do two things