Channel–Model Fit

The constraint that revenue per user and purchase frequency determine which acquisition channels a business can afford at all.

Brian Balfour (18 July 2017)

What it does

A channel's arithmetic depends on the business model: low ARPU with low purchase frequency cannot fund any paid channel. Turns channel choice from creative preference into arithmetic.

When it breaks

Early on you do not know real ARPU or retention, so the arithmetic runs on optimistic estimates. Balfour gives no dollar thresholds — any you see attached to this are someone's invention.

Case

Balfour maps the “ARPU-CAC danger zone” with real companies: low-ARPU ad models (Facebook, WhatsApp, Yelp) surviving only on viral and free channels, mid-ARPU tools (Slack, MailChimp, SurveyMonkey) in between, and high-ARPU enterprise (Palantir, Veeva) able to fund field sales.

Brian Balfour — Channel Model Fit ↗

Diagram — not yet drawn

A single ARPU axis with each channel drawn as the band it can operate in, and the dead zone where the bands do not overlap shaded.

In the wild

Unvetted · not part of the tier assessment

What has been written about this tool in the last twelve months. Machine-retrieved and unchecked — everything above this line was checked.

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