And therefore a valuable addition to the dashboard of every subscription provider. 6. Customer lifetime value (LTV) Books have been written about the concept of customer lifetime value (CLTV or LTV) and the way in which this can ideally be measured. In essence, LTV stands for the financial value that the customer represents, looking at the UK WhatsApp Number List term of his contract. In its most basic form, the LTV of an individual customer can be captured in the following formula.
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LTV ARPU x customer lifetime A simple example. If a subscriber earns $15 a month and stays for 24 months. Then his LTV can be calculated as follows 15 x 24 = $360. It is a choice whether you also include the costs of the customer when calculating LTV. You can think of the costs to acquire a customer ( customer acquisition cost ) or to service the customer ( cost to serve ).
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The advantage of this is that you get a more accurate picture of a customer’s ‘net’ contribution. However, the complexity of a net LTV calculation can create a barrier. There is of course a relationship between (volume) churn and customer lifetime. The higher the churn percentage, the shorter the lifetime of a customer (group).