One step up the spectrum, you have a slightly higher ARPU business
Posted: Thu Feb 06, 2025 5:13 am
Think of something like Dollar Shave Club or DraftKings. Businesses with a transactional model i.e. subscription e-commerce typically reside here. Because they have a higher ARPU, they can leverage higher CAC channels, like paid marketing.
arpucac3.jpeg
In the B2B world, you also have B2B products like MailChimp, Slack, or SurveyMonkey that leverage virality and paid channels to drive the majority of their sales.
arpucac4.jpeg
Moving to the right end of the spectrum, you have higher macedonia mobile database ARPU businesses typically B2B mid-market companies like HubSpot and Zendesk. They have higher ARPU and therefore can leverage high CAC channels like content marketing, inboundinside sales, or channel partnerships.
arpucac5.jpeg
Finally, on the far right side of the spectrum, you have very high ARPU businesses 6 to 7 figures and therefore can leverage very high CAC channels like enterprise and outbound sales. Companies like Palantir and Veeva exist at the far end.
arpucac6.jpeg
ARPU-CAC Danger Zone
If you noticed above, I left the middle of the spectrum blank. This is the ARPU-CAC danger zone.
arpucadanger.jpeg
I call this the Danger Zone because the companies that end up in this zone have a much higher failure rate because they lack Channel Model Fit. The problems these companies have with Channel Model Fit can be broken down into two main reasons.
arpucac3.jpeg
In the B2B world, you also have B2B products like MailChimp, Slack, or SurveyMonkey that leverage virality and paid channels to drive the majority of their sales.
arpucac4.jpeg
Moving to the right end of the spectrum, you have higher macedonia mobile database ARPU businesses typically B2B mid-market companies like HubSpot and Zendesk. They have higher ARPU and therefore can leverage high CAC channels like content marketing, inboundinside sales, or channel partnerships.
arpucac5.jpeg
Finally, on the far right side of the spectrum, you have very high ARPU businesses 6 to 7 figures and therefore can leverage very high CAC channels like enterprise and outbound sales. Companies like Palantir and Veeva exist at the far end.
arpucac6.jpeg
ARPU-CAC Danger Zone
If you noticed above, I left the middle of the spectrum blank. This is the ARPU-CAC danger zone.
arpucadanger.jpeg
I call this the Danger Zone because the companies that end up in this zone have a much higher failure rate because they lack Channel Model Fit. The problems these companies have with Channel Model Fit can be broken down into two main reasons.