What is The Average Lifetime Value of a Customer
Posted on December , 2016
You know, one of the biggest things that made a difference for me not making any money to making what I thought was a lot of money was understanding a few numbers.

The biggest one would be lifetime value of a customer, lifetime value of a member whatever you want to call it. Even if you don't actually know how to calculate that number, even if you don't have any idea, I guarantee you can guess the average lifetime value of a customer. Let's say the average lifetime value of one of your customers (between the people that never make a first payment and the people that have paid 127 payments) is harboring right between \$1650 and \$2250 so, let's just say \$2000.

So the lifetime value of one of your members is on average \$2000. Now if you know every customer that comes in your door is worth \$2000, how much are you willing to spend to buy a customer? Are you willing to spend a \$100 to buy \$2000? You should be. Obviously there are expense against that \$2000, so let's just say it is \$1000, we're going to cut it in half. Are you willing to spend a \$100 to make a \$1000? You would net \$900, that's a pretty good return on investment, right? What if it's \$200? Now you only net \$800 for every \$200 that you spend, is that still a good investment? Absolutely.