02.7.5 · Skill in Business models
Customer lifetime value
The total revenue a customer brings over their whole relationship with the product.
Lifetime value combines price, margin and how long customers stay. It sets a ceiling on what you can spend to acquire a customer. Small improvements in retention often raise it more than price changes do.
Resources
2- articleStart here16 startup metrics ↗Andreessen Horowitz · 2015 · 18 min
Clear definitions of the business metrics investors ask about, such as bookings, recurring revenue and lifetime value.
- articleGo deeperSaaS Metrics 2.0: a guide to measuring and improving what matters ↗David Skok · 2013 · 35 min
The standard long-form reference for MRR, churn, LTV and CAC, with the formulas and the reasoning behind them.
Tools
none yetTools for this topic are being researched.