The Downside of Selling Tombstones
Earlier today I was talking with an entrepreneur about a startup idea. The idea was to provide a service for an event that only happens rarely in someone’s life. It struck me as a huge difficulty.
The cost of customer acquisition is the largest and most painstaking cost of most businesses. If your product or service is something people only ever buy once or very rarely, all the effort of customer acquisition dies with one sell.
For example, there is only one time when a person needs a tombstone. There are no repeat customers in that business. There is no lifetime value of the customer to compute.
Businesses with the tombstone dynamic are at the opposite end of the spectrum from SaaS businesses which charge monthly recurring revenue and have enormous lifetime value from their ongoing customer relationships.
Does your business sell recurring revenue products or services? Or do you sell tombstones?