Acquisition modeling
What an acquisition model needs to answer
A working acquisition model tells you where the next dollar goes. Four questions decide whether it does.
Ironstark1 min read
Many acquisition models are spreadsheets of averages. They report a blended cost per acquisition and a blended conversion rate, and they cannot tell the business what to do next. A useful model answers four questions.
What does an outcome cost, by source?
Blended numbers hide the segments that lose money. Break cost per completed outcome out by channel, geography, and case or service type.
What is an outcome worth?
Value differs by type and by source. Use realized value where the data exists and expected value with stated assumptions where it does not.
Where does the funnel break?
Show conversion at each stage: contact, qualification, completed outcome. A drop at one stage points to a different fix than a drop at another.
What happens at the next budget level?
Costs rise as a channel scales. The model should estimate how cost per outcome changes with spend, so budget decisions account for diminishing returns.
A model that answers these four questions is a planning tool. One that does not is a report.