This blog post will give you an understanding of the key metrics you should focus marketing on per each business type.

Time to read: 3 mins.

I’ve been a big fan of Fred Wilson’s recent ongoing essay series on the different types of revenue models that online businesses use. The AVC community distilled the final list to nine (9) revenue model categories branching into eighty-eight revenue streams. Clear and concise, I highly recommend you check it out.

I thought I’d add some clarity to the business models by offering what we’ve seen as the key metrics per business model. I hear/see common misuses of terms such as using MRR to measure the success of advertising revenue models when MRR is a key metric in subscription business models but has absolutely no relevance to advertising models. If you can only improve what you measure then you better make sure you measure the right things. The following lists the key metrics per business model type.  Note: I omitted data monetization since that’s not a business model that is in our investment thesis.

Advertising

• CPM – cost per thousand impressions
• CPA – cost per acquisition
• CPC – cost per click
• DAU – daily active users
• MAU – monthly active users

eCommerce

• AOV – average order value
• LTV – lifetime value
• Activation rate
• CAC – cost to acquire a customer

Subscription 

• MRR – monthly recurring revenue 
• Churn
• NPS – net promoter score (or other customer satisfaction/loyalty metric)
• CAC – cost to acquire a customer

Peer-to-Peer Marketplaces

• Take rate – what the marketplace takes per transaction 
• Activation rate – from user to transacting user
• # Transactions per user
• Transaction volume
• CAC – cost to acquire a customer

Licensing

• Per seat/device/application license 
• LTV – customer lifetime value
• Customer lifetime

Mobile 

• DAU/MAU – daily active users/monthly active users 
• 7-day retention
• 30-day retention
• ARPDAU/ARPMAU – average revenue per daily active user/average revenue per monthly active user
• Customer lifetime
• CPA – cost per acquisition

Gaming 

• ARPDAU/ARPMAU – average revenue per daily active user/average revenue per monthly active user
• Customer lifetime
• Viral coefficient
• Viral loop
• CPA – cost per acquisition

Here’s a visual for you to download, print out and study.

If I missed anything, let me know in the comments.