Cathryn

speaker

286 appearances 3 recordings 2 series first heard Mar 2016 last heard May 2021

Cathryn’s voice in public audio — every appearance, attributed to the second.

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Australian Finance Podcast · $10k share portfolio: 11 investment ideas in 2021 · 31 May 2021 podcast

So the basic idea for any sustainable business is that it costs less to acquire a customer, which is the customer acquisition cost or CAC, than what the customer pays over the expected lifetime, which is the customer lifetime value.

So at the moment, Xero has an LTV to CAC ratio of 6.4 times.

And this means that Xero thinks that it gets $6.40 back for every $1 it spends to acquire a customer.

So basically, Xero is spending naturally all of this money in sales and marketing, advertising, to attract all of these customers now, which in the future is going to pay heaps of dividends.

Not dividends, but like, yeah.

Figurative, yeah.

Down the line.

It's super sticky, pricing power, all the good things.

In terms of risk, it's already priced for a lot of growth at the moment and also competition.

So in the US in particular, there's a big, big company called Intuit, which offers a service called QuickBooks, and that's definitely the leader in the US.

There's also Sage as well, MYOB, FreshBooks.

So Xero isn't the only player, but it's definitely a disruptor.

Yes.

No, thanks for having me.

Australian Finance Podcast · Share Investing Q&A: Blue chip stocks, takeovers and jargon busting galore! · 24 May 2021 podcast

Mine is starting at the very top.

So understanding the business and knowing what it does, the business model, the different products and services, because I think everything else kind of just flows from there.

If you really put the work in to understand the business, you can kind of get an edge.

Yeah, sure.

So there's a famous quote, I think it's by the great Warren Buffett, which goes something like, price is what you pay and value is what you get.

And then put another way, you could say, price is what you're asked to pay and value is what you're willing to pay.

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