Why is Validated Learning Important?

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Founders need to think carefully about the different data they track in order to learn useful insights. This will help them make better decisions and improve their business. Never forget that the number of validated learnings is a measure of success. Validated learning is backed up by empirical data collected from real customers, translating into positive improvements in the fundamental indicators of the startup. This evidence confirms that what we’re doing works and leads to better outcomes for our users.

The key to validated learning is to constantly be testing and iterating on your product. This way, you can be sure that you are always making improvements that are based on what your customers actually want.

Some key data points that startups should track in order to validate their learning include:

Customer acquisition costs

Customer acquisition costs: The cost of acquiring a new customer is the total cost of all marketing and sales activities required to persuade a potential customer to buy a product or service. This includes advertising, promotion, sales commissions, and the cost of developing and maintaining a sales force as well as all future purchases, as well as any referrals they may make to other potential customers. A company’s customer acquisition costs must be less than the lifetime value of a customer in order for the company to be profitable.

Churn rates

CR is a key metric for subscription businesses. Churn is the percentage of customers who cancel their subscription in a given period of time. A high churn rate can be a sign that your product is not meeting customer needs, or that your pricing is too high. There are a number of ways to reduce churn, including offering discounts and free trials, improving customer service, and making it easy to cancel subscriptions. If a business has high churn rates, it means that it is losing a significant amount of its customer base. This can have a major impact on the business, as it can lead to a decrease in revenue and profit. There are many reasons why customers may choose to leave a company. Some may be dissatisfied with the product or service they received. Others may be lured away by competitors. Whatever the reason, high churn rates can be detrimental to a business. There are several ways to reduce churn rates. One way is to improve the quality of the product or service that is being offered. Another way is to provide better customer service. Finally, businesses can try to retain their customers by offering them incentives to stay with the company.

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The lifetime value of a customer

Customer Lifetime Value (CLV) is the total amount of money that a customer spends with a company over the course of their relationship. There are a number of ways to calculate customer lifetime value, but the most common method is to take the average amount a customer spends per transaction and multiply it by the number of transactions they make over their lifetime. For example, if a customer spends an average of $50 per transaction and makes 10 transactions over their lifetime, their customer lifetime value would be $500. Customer lifetime value is important because it allows businesses to calculate how much they can afford to spend on acquiring new customers. If a business knows that each new customer is worth $500, they can justify spending up to $500 on acquiring each new customer. Acquiring new customers is important for businesses because it helps them grow their revenue. However, businesses need to be careful not to spend more on acquiring new customers than the customers are actually worth. Otherwise, they will end up losing money in the long run.

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Net promoter score

NPS is a the survey asked customers to rate the company’s service on a scale of one to 10. The results were then divided into three categories: promoters (those who rated the company nine or 10), passives (those who rated it seven or eight) and detractors (those who rated it six or below). A company’s NPS score is calculated by subtracting its percentage of detractors from its percentage of promoters. The resulting number can range from -100, if every customer is a detractor, to 100, if every customer is a promoter. According to the report, Apple has maintained an NPS score above 50 for 18 consecutive quarters.

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