Katie Bauer!

To determine your business model, ask yourself what your users or customers need to do for your team to be successful. Sometimes this is directly tied to money (the user needs to see ads so we can generate revenue), sometimes it's not (the user needs to create new content).

Once you've got metrics, you can get into benchmarks. It's obvious that you should compare yourself to competitors in your vertical, but how do you compare to non-competitors that have the same business model?

This isn't to tell you where you should be, per se, more of a way of understanding how other businesses use these metrics to measure their strategy. To make this a little more concrete, let's compare two hypothetical businesses.

Company A sells a subscription box for hiking snacks called GORPorate. Company B is a productivity suite called SrsBsnss. Both are fundamentally based around subscriptions, and as a result, both care about conversions and churn, as well as customer acquisition costs.

GORPorate is direct-to-consumer (DTC) and SrsBsnss exclusively relies on enterprise clients, meaning their margins per customer are vastly different. As a result, each company will place more importance on conversion and churn.

This will of course depend on where their businesses are at, but you'd generally expect GORPorate to focus more on conversions, generating revenue through volume. If customers churn, it's not that big of a deal because getting someone to pay for a $30 box of snacks is fairly easy

On the other hand, SrsBsnss depends on huge corporate contracts. Maybe they only have a dozen or so customers who provide all their revenue. This means losing one customer could be catastrophic, and as a result they worry more about churn.