Business Quote by Eric Ries
““The rate of growth depends primarily on three things: the profitability of each customer, the cost of acquiring new customers, and the repeat purchase rate of existing customers. The higher these values are, the faster the company will grow and the more profitable it will be. These are the drivers of the company’s growth model.””
About This Quote
Source Book: The Startup Way, 2017
Growth is driven by customer profitability, acquisition cost, and repeat purchases; optimizing these metrics accelerates expansion and profitability.
In simple terms: Focus on profit per customer, acquisition cost, and repeat buying.
Key Takeaway
Optimize these three levers for growth.
Themes
business strategy
growth
metrics
Mood
analytical
pragmatic
Type
strategic
educational
When to use this quote
- startup planning
- marketing strategy
- financial forecasting
- product development
Key Concepts
customer economics
scaling
repeat business
Questions to Reflect On
- How can you improve customer profitability?
- What ways reduce acquisition costs?
A Different Perspective
Neglecting other factors like market conditions can limit growth.
![“[S]ometimes, when you are a food person, the possible irrelevance of what you are doing doesn’t cross your mind until it’s too late. (Once, for example, when I was just starting out in the food business, I was hired by the caper people to develop a lot of recipes using capers, and it was weeks of…” quote by Nora Ephron](https://sms4smile.com/quotes/img-quotes/d79/nora-ephron-1217_business_s-ometimes-when-you-are-a-food-person-th_980.jpg)
![“If the State does not acquire supremacy over [vast private] enterprises, it becomes their puppet, and they become the real State.” quote by Bertrand Russell](https://sms4smile.com/quotes/img-quotes/bad/bertrand-russell-69_acquire_if-the-state-does-not-acquire-supremacy_1379.jpg)