Whether it is a startup or an established firm, the mechanism of growth needs to be sound and effective. In the case of a startup, the growth rate becomes even more decisive due to the increasing casualties with each passing day.
Well, one should evolve with changing dynamics of business and market behavior. As an entrepreneur, there is a need to carve out the perfect engine of growth to make sustainable progress over the course of time. It is not advisable to draw the conclusion based on the media or advertising strategy. One can come across to several metric that enables to perform the analysis and get the numbers.
Here the question arises, what are the different metrics and how to identify those to understand the ideal three driving engines for the growth of business.
In the business, it becomes crucial to have a complete control on the audience behavior towards the business products. What helps to understand this is called as the three engines of growth. Take a glance to gain valuable insights.
Viral Engine: – This compromise of advertising your product through several medium along with gaining the visibility by itself. It consists of satisfied customers spreading the good reviews among their circle. and in this process advertising it. The vital part of this engine is to assure every customer ropes more than one person to your product.
Basically, it is a coefficient that gives the data of referred users from customers or products in relation to the overall number of users. No denying; it proves to be decisive in gaining valuable inputs on whether the product is a hit or miss among the people.
If the viral coefficient is more than 1, the viral growth is considered to be positive and if it’s less than 1 that proves it is negative. The effectiveness of the viral engine is directly proportional to the product being perfectly suited to the niche market.
Sticky Engine: – In thee act of pursuing new customer, there’s no way to neglect the importance of customer retention. The sticky engine of growth is tailor made to meet the goal of retaining the customer for a lifetime.
Take the necessary steps to achieve the low attrition rate and balance it with attracting new customers every month for a steady business growth. Measure this progress by active users per month over the entire users. Once you meet the goal of low rate of leaving customers, it gives a clear picture of your progress.
The rise in the customer retention assures of fruitful profit on a consistent basis. Never jump to acquire new users without having a firm grip on the current customers’ satisfaction level towards your product
Paid Engine: – This is the most familiar growth engine with entrepreneurs. Under this engine, every form of advertising is covered. It doesn’t matter whether you are advertising online or offline, it falls under this engine.
The cost of operating this engine needs to give you enough profit to keep it going. The benefit is measured in terms of Life Time Value (LTV), the total profit gain over the use of product during the entire time in comparison to Cost Per Acquisition (CPA), which is the total capital invested to acquire that customer.
On subtracting the LTV and CPA, the number over zero is considered to be a good sign. This indicates the growth is positive and the growth engine is effective.
Make sure to well informed on the three engines of growth and maximize the business potential for a successful venture. Get in touch with us to know more about scaling your startup.
