Re-engagement is the key. This is important because the sneaky problem with e-commerce is paying to reacquire your existing customers. As an investor, I see a lot of companies with a killer product who have built $10 million in revenues at a rapid clip. (Understandably, most burn some cash to get there, but if companies didn’t burn cash to build, I’d be out of a job.) In almost all cases, these businesses have an “at-scale economics” slide in their pitch deck that shows a customer will be quite profitable in time – buying from them several times a year, and thus justifying the $42 spent to acquire them as something that will be easily amortized across future purchases. Re-engagement drives higher LTVs, which enable the ability to spend more on acquisition.

That’s a nice little $40M ecommerce company you have there. Call me when it scales | PandoDaily Tuesday, March 25, 2014 @ 10:07pm