The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth

by Eric Ries

The key piece of data in this process is the per-customer input, something that can be measured in a sample of any size; it’s the same currency whether you’re looking at one customer, ten customers, or ten times that many. And, critically, you can show changes to it over time much earlier than you could show other significant gross numbers. Per-customer learning metrics include: Conversion rates (such as the percentage of customers who try a free trial of a product who subsequently become paying customers). Revenue per customer (the amount of money customers pay for a product on average). Lifetime value per customer (the amount of money the company accrues from an average customer over the entire “life” of his or her relationship with the company). Retention rate (what percentage of customers are still using the product after a certain amount of time). Cost per customer (how much it costs to serve a customer on average). Referral rate (what percentage of existing customers refer new customers to the product, and on average how many referrals they make per unit of time). Channel adoption (what percentage of the relevant distribution channels carry the product).