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4 Indicators to Help Change Business Models Before It Is Too Late

It is common for startups to measure the performance of their business models. Majority of the metrics and KPIs are for growth. Are you in the growth curve yet? In this article at, Craig Bloem discusses 4 metrics to help change business models before it is too late.

Time to Change Business Models

Those metrics indicate if your startup business is moving towards revenue generation. Analyzing the report also helps you identify the improvement areas. Following are the 4 metrics that help you change business models before it is too late:

Increasing Customer Acquisition Cost:

Well-established brands invest a lot to attract new customers. It is tough competition out there. So, it feels justified to spend on gaining customers for your business. The trendy marketing campaign for new products can add up to the cost. Or maybe, the increasing cost is because of some challenges you are facing in-house? It is possible to take cost inefficiency for granted at the initial period. Keep a tab on cost as you cannot afford fancy money drain just at the beginning of your business.

Increasing Churn Rate:

Churn rate is a comparison between the rate of customers you have acquired against the customers that left already. You must always have churn rates as low as possible since the lifetime value of customers is a lot. If your business gets customers through subscription, you can improve the experience for better response. Enhance services, add more services, categorize customers as per campaign, incentivize subscription, etc. Even after that if your customers do not like the services, the churn rate will increase.

Everchanging Margins:

There can be multiple sponsors for your startup. If the change in their contribution forces you to use your own savings, you have a problem. It also indicates shifting customer needs or industry trends. Dig deeper than just shuffling across profit margins every once in a while. Find out if you are faring well in each segment. A failed margin can affect dependent or seemingly independent categories as well.

Overflowing Inventory:

It is common for customers to buy specific products more than others. However, if a category of products has not moved for a significant period, it is time you had prioritized others.

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