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
$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
Other Shopify Store Upgrades?
- Let us know what you have in mind, and we'll handle the technology to get you there.
No billable hours
only flat rate pricing.
and regular meetings.
and weekly progress.