Frequently Asked Questions
When launching a new product or a new campaign, its common to not have a thorough understanding of risk.
Breakeven is commonly used to establish what the acceptable risk is based on expected returns.
Returns could be defined differently for different industries.
If it's a subscription business, LTV(lifetime value) is a good measure of return.
In this case, Risk/LTV gives you how many subscribers you need to acquire to breakeven.
Return can be represented in a lot of different ways.
For e.g., if you own a business that sells smart phones, returns per unit/capita can be used as a good representation.
In that case, its defined as the price of the product minus the cost to manufacture and any additional overhead per unit.
Try our products or talk to us to see how we can help define returns specific to your industry.
Risk is the investment you put in for a desired outcome.
The investment could be personnel, marketing spend, opportunity cost etc.
For e.g., if you are doing an email campaign to promote a new product, the risk in this case is the cost of sending an email.
If you send a million emails and your CPM (Cost per thousand impressions) is $10 the risk is worth $1,000.
Measurement in crucial in evaluating success or failure of the risks organizations take.
Setting up experiments (test and learn) to see whether the risk achieved the goal you set allows you to scale up or down your future investments.
No cost for the services you can sign up and use.
For any consultation or to make those services customizable for your needs, we would evaluate the level of effort, the cost it takes us to develop and the returns we as an organization look for at the time of negotiation.
We are constantly working on expanding our free services so be sure to come back and check out our website.
