Customer LT can be measured by the formula (1/Churn-rate) you can measure churn rate even if a cohort is still has customers. It can be predictive churn rate.
Yes I prefer to think of churn in terms of # months people are likely to stick around. 24 months is often a good starting guess. You can then divide 1 by # of months to get the implied monthly churn rate. 1/24 months = 4.2% monthly churn, for example.
Thanks Mike for the clear explanation! One question is: for method 2 coffee example, we can use method 1's contribution margin to explain it as well right? In fact, is method 2 more applicable to product whose repeated consumption does not incur substantial costs, such as Netflix? Otherwise, it seems method 1 is always useful.
Yes you can use method 1's contribution margin to explain the coffee example. No matter which method, you always need to subtract out the variable costs (usually cost of goods sold) to properly calculate the lifetime value.
Absolutely great content!
Thank you Mike. You have saved a start-up here. Thanks once more.
Thanks Mike, absolutely loved the content, simple and easy to follow with great real life examples. Kudos
Great teacher and explainer
Excellent video🎉.Finally I have found an easy to understand video on unit economics.
Glad you liked it!!
Thanks Mike; really appreciate how you show the relationships between the different metrics. So useful.
Uh..... So Good! This information will help us skyrocket our startup! Thanks so much Mike!
You bet!
Thanks mike..giving us free knowledge ❤
More to come!
Thank you, Mike!
Best video ever thank you !!!
Wow thanks!
You’re a legend mike!
Haha thank you! Glad my videos are helping.
thank you
Thanks, Mike Sir for this explanation.
Great content here!
Great video!
Glad you enjoyed it
Thanks Mike :)
Great, great work Mike. Thank you.
Customer LT can be measured by the formula (1/Churn-rate) you can measure churn rate even if a cohort is still has customers. It can be predictive churn rate.
Yes I prefer to think of churn in terms of # months people are likely to stick around. 24 months is often a good starting guess. You can then divide 1 by # of months to get the implied monthly churn rate. 1/24 months = 4.2% monthly churn, for example.
Thanks Mike. I've learned a lot :)
Glad to hear it!
such a helpful video thanks a lot!
This is a great video. Thanks for it.
Glad you liked it! Please feel free to suggest topics for me to cover.
Great content, thank you
Mike! great content! thank you!
Glad you liked it!
This is a great video.
Glad you enjoyed it! Glad you liked it! Please feel free to suggest topics for me to cover.
Thanks Mike for the clear explanation!
One question is: for method 2 coffee example, we can use method 1's contribution margin to explain it as well right? In fact, is method 2 more applicable to product whose repeated consumption does not incur substantial costs, such as Netflix? Otherwise, it seems method 1 is always useful.
Yes you can use method 1's contribution margin to explain the coffee example. No matter which method, you always need to subtract out the variable costs (usually cost of goods sold) to properly calculate the lifetime value.
@@MikeLingle Thanks Mike for your reply!
7:21 LTV = -0.1 x CAV is this a typo? Is this, "LTV = -1.1 x CAV", correct ?
Yes good catch! I think it's actually LTV = 0.9x CAC. I will update it in my slides. Thank you!
A great video. Thanks 🙏🏻