It hurts my soul (I admit that I also made a mistake and it takes you a long time to realize) when we try to start a business “because you want to”.
Time is short, your competition. What I learned?
When a moment of stress arrives, flee forward, stop and think:
- What I do for a living? this is simple*
- What metrics detail what I do for a living?
Make a list of the metrics that make you earn money, survive, grow, …
You need to sell to live or grow. How much do you want? Do you have it clear? Surely that is the amount you are thinking? How do you know it? What is your base?
You should base on data such as:
- Lifetime value (LTV): That is, how much you earn per client during their life as your customer?
- If you know your (LTV) it is very easy to know how much you should do for a customer acquisition cost (CAC). Suppose it is 1/3, 1 / of the LTV.
- What is the conversion rate (CR) of your website? and by channel? If you know the (CR) and the CAC it is easy to calculate your CPC.
So, in a moment you know how much your CPCmax should be in (sem, criteo, facebook ads, …) to get profitable customers