Break-even model¶
1. Principle (Atul, 17 Oct)¶
Two sets of metrics:
- New business: brings new clients. Revenue comes later (search ranking, leads, conversion and onboarding take months).
- Customer support (servicing): keeps and grows existing clients. Revenue comes quickly: insurance renewals, mutual fund trail on a growing portfolio, SIP continuity, cross-sell.
Priorities (Atul, 17 Oct 19:48): - Servicing: ULIP renewals and ULIP fund enhancement first (largest customer base); then other insurance renewals and MF portfolio growth. - New business: MF SIPs, Health, Term, Motor. Sales and support staff per vertical come through an outsourcing agency; a pilot runs now with one motor-insurance resource, which gives the first acquisition-cost figures (N6) per vertical.
So in the next sprints, servicing features should carry more near-term value than their size suggests, while new-business features build the pipeline.
2. Costs (monthly, ₹) — to fill¶
| Cost line | Now | Notes |
|---|---|---|
| AI subscriptions (Claude, ChatGPT accounts A and C, others) | ||
| Metered AI APIs | 0 | Cap ₹3,000 for sprints 1–2 (DR-007, ODM-1) |
| Hosting (Lightsail production, Bluehost, domains, certificates) | ||
| Tools server (deferred, DR-004) | 0 | |
| People (Ajay, others) | ||
| Total monthly cost (C) |
3. Customer support (servicing) metrics — near-term revenue¶
| Metric | Definition | Monthly value | Revenue formula |
|---|---|---|---|
| S1 MF AUM under service | Total mutual fund assets of existing clients | Trail revenue ≈ AUM × average trail rate ÷ 12 | |
| S2 AUM growth | Net new SIPs and lumpsums from existing clients, plus market movement | Adds to S1 next month | |
| S3 SIP continuity | Active SIPs ÷ SIPs due; stopped SIPs recovered | Protects S2 | |
| S0 ULIP book | ULIP policies in force, premium and fund value (totals); today about 3,000 customers with ICICI Prudential Life ULIPs | Renewal premium × renewal commission; fund value drives retention | |
| S4 Insurance renewals due | Policies (life, health, motor) with renewal in the month, and premium | Renewal revenue ≈ premium renewed × renewal commission rate | |
| S5 Renewal rate | Renewed ÷ due | Multiplies S4 | |
| S6 Cross-sell to existing clients | New products sold to existing clients (for example health to an MF client) | First-year commission on these | |
| S7 Retention | Clients still active after 12 months | Protects everything above | |
| S8 Service response | Requests answered within the agreed time | Leading indicator for S5 and S7 |
Servicing revenue (R_s) = trail on S1 + renewals (S4 × S5) + cross-sell (S6).
4. New business metrics — later revenue¶
| Metric | Definition | Monthly value | Lag to revenue |
|---|---|---|---|
| N1 Organic visitors | Website sessions from search | 3–6 months after SEO fixes | |
| N2 Leads | Enquiries, calculator sign-ups, call-backs | ||
| N3 Lead-to-client conversion | New clients ÷ leads | 1–3 months | |
| N4 New clients | |||
| N5 First-year revenue per new client | By product line: MF, insurance, loans | ||
| N6 Acquisition cost | Spend (ads, tools, agency staff) ÷ new clients, per vertical (MF SIP, Health, Term, Motor) | Motor pilot first |
New business revenue (R_n) = N4 × N5. Each new client then joins the servicing base (S1, S4), so new business also raises future R_s.
5. Break-even¶
- Monthly break-even when R_s + R_n ≥ C.
- Expected path: R_s closes most of the gap first; R_n grows with a lag and compounds through servicing.
- Each sprint shows its expected effect on named metrics, for example "renewal reminders: +x points on S5".
6. Which product work moves which metric¶
| Product work | Metrics | Set | Sprint |
|---|---|---|---|
| ULIP renewal due-list and reminders | S0, S4, S5, S8 | Servicing | Sprint 2 (SPR-2) |
| ULIP fund enhancement (fund performance within each policy, switch suggestions) | S0, S7 | Servicing | Needs ULIP fund NAV data (ULIP-1) |
| Other renewal reminders (health, motor, term) | S4, S5 | Servicing | After ULIP |
| Client portfolio review (PE #309/#336) | S1, S2, S6, S7 | Servicing | Sprint 1–2 |
| SIP continuity alerts (MM-Cron NAV data) | S3 | Servicing | Backlog |
| Fund factsheet pages (MWMC) | N1, N2, and S8 for existing clients | Both | Sprint 2 |
| SEO basics (MWMC) | N1 | New business | Sprint 1 |
| Category tree and catalogue (MCRM, API) | N2, S6 | Both | Sprints 1–2 |
| Calculators and lead capture (WPDev, MWMC) | N2, N3 | New business | Backlog |
7. Figures needed from Atul (rough is fine)¶
- Monthly costs (section 2).
- Current MF AUM under service and average trail rate.
- Policies renewing per month, average premium, renewal commission rate; current renewal rate.
- Current monthly leads, conversion and new clients, if known.
Totals only; no client names, PAN or policy numbers.