Why not Customer Lifetime "Value"?

Because I believe that ad agencies created the idea of Customer Lifetime Value/CLV to justify increasing Customer Acquisition Costs by removing "cost" from the CLV framework.

Good agencies will calculate Customer Lifetime "Value"/Profit based on profit like so:
(REV - MAINT. COST) / CHURN %

This is how to properly measure your subscription business financial health^ as proven by recurring revenue business models from the SaaS. 

Healthy CAC : LTV ratio for a recurring revenue business: 1:3
ex:
$100 (acquisition) vs $350 (profit/churn)
Framework borrowed from John Warrillow 


Why Customer Lifetime Profit?

Because I believe that ad agencies created the idea of Customer Lifetime Value/ CLV to mask ever increasing Customer Acquisition Costs by tying Value to topline revenue. 

 

Things you can do to boost CLP:

  • Implement a membership model¬†with secondary and tertiary benefits to being a subscriber:
    • Subscriber only "free lifetime shipping"
    • Subscriber only Collections of "Past Boxes"
    • Subscriber only digital downloads
    • Subscriber only email lists & early¬†sale access
    • Subscriber only bulk discount perks
    • Communicating all brand benefits well via email
    • Implement upselling + bundling apps / increase your average cart size
  • Let us know what you have in mind, and we'll handle the technology to get you there.
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