If the holiday season is your business’ peak, you’ve likely run a number of promotions, both for customer acquisition and to bring back existing customers.
Are these promos profitable?
This week’s infographic highlights Customer Lifetime Value, or the “projected revenue a customer will generate through their lifetime.” If you’re not measuring this today, KISSmetrics walks you through the LTV formula.
Click to view large infographic
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Excellent infographic. If nothing else, this shows the importance of not relying on only ONE formula to base your LTV. The Starbucks model is probably a rare case as they base their customer lifespan at 20 years – I’d say that’s a pretty risky assessment for most companies today. I think with even a 3-5 year lifetime assessment, you can get pretty close.