The recent acquisition of Outdoor Voices by Consortium Brand Partners has been making waves in the business world, sparking reflection on what makes a brand truly investible. When assessing whether a brand is a worthwhile investment, focusing on customer signs is crucial.

Determining Brand Investibility Through Customer Metrics:

Evaluating whether a brand is investible involves scrutinizing several key indicators that demonstrate strong potential for growth, profitability, and sustainability. Here are the top five customer signs that point to an investible brand:

1. High Customer Lifetime Value (CLV): Brands with a high CLV typically indicate strong customer loyalty and repeat purchases. A high CLV suggests that customers not only make initial purchases but also continue to engage with the brand over the long term, contributing significant revenue. This was likely a key consideration for Consortium in their acquisition of Outdoor Voices, as a high CLV translates directly to stable, recurring revenue streams.

2. Strong Customer Retention Rates: A high retention rate signifies that customers are satisfied with the brand's products, services, and overall experience. It indicates that the brand has successfully built strong relationships with its customer base, reducing churn and the need for continuous costly customer acquisition. Outdoor Voices’ ability to maintain a loyal customer base likely played a significant role in Consortium's investment decision.

3. Scalable Customer Acquisition Strategies: Brands with efficient and scalable customer acquisition strategies, characterized by a reasonable Customer Acquisition Cost (CAC) relative to CLV, are attractive to investors. This indicates that the brand can grow its customer base effectively without excessively high marketing expenses. For instance, prior to its acquisition, Outdoor Voices would have demonstrated a strategy that could scale efficiently, ensuring sustainable growth.

4. Positive Net Promoter Score (NPS): A high NPS reflects strong customer satisfaction and loyalty. Customers who are willing to recommend the brand to others are likely to contribute to organic growth through word-of-mouth and referrals, which can lower customer acquisition costs and enhance brand credibility. A high NPS would suggest that Outdoor Voices enjoys strong word-of-mouth promotion, making it an attractive investment.

5. Low Market Penetration Rate: A lower Market Penetration Rate indicates that there is still a large portion of the market that the brand has yet to attract or convert into customers. This metric is valuable because it highlights the growth potential and opportunity for expansion within the brand's target market. For Outdoor Voices, a lower penetration rate would mean significant room for growth, making it an enticing prospect for Consortium Brand Partners.

The Path to Investibility

These customer signs collectively demonstrate that a brand has built a solid foundation of satisfied and loyal customers, efficient growth strategies, and potential for long-term success and profitability, making it attractive for investment.

As we move forward in this dynamic market, it’s clear that the brands which prioritize and excel in these customer metrics will stand out as prime candidates for investment, much like Outdoor Voices did for Consortium Brand Partners. The focus on customer-centric metrics is not just a strategy for growth but a blueprint for sustained success and profitability in the competitive landscape.