BMDNA Glossary

A channel through which potential customers become aware of the business and are acquired as New Leads. Examples: online marketing, direct sales, PR, referrals. In the BMM, the acquisition channel connects Customer Segments with Conversion Steps. Associated metrics: Resources, Performance, New Leads.

A planning approach where, starting from Target Metrics (e.g., revenue, profit), the required values of the BMDNA metrics are calculated. Shows which metric values must be achieved to meet strategic goals.

The Business Model DNA is a framework by Dr. Arndt Schwaiger that quantifies every business model with 9+1 metric categories. Builds on the BMM and provides the foundation for calculating CAC and CLV as well as for systematic optimization with Lean Analytics.

The universal process behind every business model: Customer Segments are reached through Acquisition Channels, move through Conversion Steps, and generate revenue through Revenue Models. The structural foundation of the BMDNA.

The iterative optimization process from the Lean Startup approach, applied to the BMDNA. Formulate a hypothesis for improving a Key Metric, run an experiment, measure the result. Repeat until the Target Metric is achieved.

The total cost to acquire a paying customer. Derived from Resources, Performance, Conversion Rate, Duration, and Costs. The ratio of CAC to CLV shows whether a business model is viable.

The total contribution margin a customer generates over the relationship. Derived from Transactions/Lifetime, Net Prices, and Margin. A viable model requires CLV > CAC.

The percentage of leads that successfully complete a Conversion Step. One of the most important levers on CAC and often the Key Metric for early-stage startups.

A single step from first contact to purchase. Each step has its own Conversion Rate, Duration, and Costs. Connects Acquisition Channels with Revenue Models in the BMM.

Direct expenditures during Conversion Steps — sales personnel, tools, infrastructure. Together with Resources, Performance, Conversion Rate, and Duration, costs determine the CAC.

A defined group of potential customers with similar needs and behaviors. The starting point of the BMM. A separate BMDNA is created for each segment.

A business model where even under optimistic assumptions, no viable CAC-to-CLV ratio can be achieved. Recognizing a dead horse early prevents wasting resources on an unviable model.

The time a potential customer needs to complete all Conversion Steps. Directly impacts CAC — longer conversion durations cause higher costs.

A data-driven argument chain demonstrating a business model is viable. Uses BMDNA metrics to convince investors with numbers instead of claims.

Systematic investigation of which individual metrics have the greatest impact on Target Metrics (CAC, CLV, profitability). Identifies the Key Metric and sets optimization priorities.

The individual metric that currently has the greatest leverage on Target Metrics. Identified through Factor Analysis and the focus of the next Build-Measure-Learn Cycle.

The data-driven optimization approach connecting the BMDNA with the Build-Measure-Learn Cycle. Identify the Key Metric, formulate hypotheses, run experiments, and optimize iteratively.

A clear overview of all BMDNA metrics, Target Metrics, and Status Quo. The central control instrument for data-driven business model optimization.

The percentage of net revenue remaining as contribution margin after deducting direct costs (COGS). Together with Transactions/Lifetime and Net Prices, it determines the CLV.

A measurable quantity that quantifies a specific aspect of the business model. The BMDNA defines 9+1 metric categories. Not to be confused with a Vanity Metric.

Average net revenue per transaction. Together with Transactions/Lifetime and Margin, this determines the CLV.

The number of potential customers acquired per period through Acquisition Channels. Calculated as Resources multiplied by Performance.

The efficiency of Acquisition Channels — how many New Leads are generated per unit of resource. Together with Resources, determines total new leads.

Total investment (budget, personnel, time) allocated to Acquisition Channels. Multiplied by Performance, yields New Leads.

How a company generates revenue from customers. The final step in the BMM. Associated metrics: Transactions/Lifetime, Net Prices, Margin.

The current snapshot of all BMDNA metrics. The baseline for Factor Analysis, Key Metric identification, and iterative optimization.

A strategic metric like CAC, CLV, revenue, or profit — derived from the BMDNA metric categories. Defines the optimization goal. Concrete metric target values are set through Backward Calculation.

How many transactions a customer completes over the entire relationship. Together with Net Prices and Margin, determines the CLV.

The economic view of a single customer: what does it cost to acquire them (CAC), and what do they bring in (CLV)? The BMDNA derives both from the 9+1 metric categories.

A number that looks good but provides no actionable insight (e.g., raw page views, downloads). The BMDNA focuses exclusively on metrics directly linked to CAC, CLV, and profitability.