If there’s one metric that traders must be taking a look at far more rigorously in crypto is retention, however extra particularly the nuances of the info factors that make up the standard of retention. I’ll clarify what I imply under.
Let’s take a easy dApp for instance that claims they’ve a D60 90% retention price with their customers. You’d suppose that’s nice, proper?
But now what if I informed you that that D60 90% retention price price was compromised of customers who:
Are you actually going to take a look at that D60 90% retention quantity that rigorously? Probably not, as a result of they’re getting airdrop farmed. Nice.
Furthermore, what if we knew by way of the info that out of the 1000 wallets you’ve, 3/4 of them had been creating a number of wallets after which utilizing your product? Your retention numbers are as soon as once more thrown off since prime quality customers who stopped utilizing the product will skew your retention numbers considerably once more.
Why does this even matter, if quantity go up then token go up and yield go up? Right?
False. The downside is that no matter acquisition prices you’ve incurred (from a time, cash or assets) to run that marketing campaign grew to become much more costly than your projections or calculations are saying. Here’s a extra tangible instance to make it extra clear:
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You spend $10,000 on a marketing campaign to accumulate 100 customers. You’ve successfully paid $100 per consumer as your price to accumulate them.
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With your $10m in enterprise funding, you suppose to your self “Hm, surely that’s not too bad. We just need to spend $1m to acquire 10,000 users”.
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After 90 days, solely 5 customers stay out of your marketing campaign.
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Your actual price to accumulate a consumer has gone up 20x, from $100 to $2,000. You realise you’ve now spent $1m to accumulate 500 customers.
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That’s going to go properly in your subsequent board assembly, ouch.
Of course a few of these numbers are exaggerated, however from the info I’ve seen — not by an excessive amount of.
The bull market and ponzinomics lured folks right into a false sense of their economics. The bull market is revealing it however folks nonetheless don’t know the true extent of all of it — when they need to.
Before you concentrate on acquisition an excessive amount of, you wish to be sure to don’t have an excellent leaky funnel as a result of it’s going to price you a number of tokens.
The solely cause I’m writing about it is because the extra I see by way of the info with ARCx, the extra I realise commonalities in issues throughout the board.
Please, take into consideration retention and begin measuring it correctly. Your unit economics will thanks for it.
