How to Calculate Customer Lifetime Value for SaaS | Eric Andrews Clips

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We cover how to calculate customer lifetime value for a SaaS startup and how to include updates to your LTV estimates in an investor update.
🎥 Clip taken from: How to Track Financial Performance for SaaS Startups | 7 Most Important Metrics • 7 Most Important SaaS ...
🚨 Join my Finance for Startups training program (with personalized support, live streams, and more): www.ericandrewsstartups.com/f...
#ltv #saas #investorupdate

Опубликовано:

13 июн 2023

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Комментарии : 6

@hudzaifahhudzaifah-zv6yw 4 месяца назад

Hi Eric! Thx for the video. CMIIW. You had another video how to calculate CLV with difference ways with this one. Can you explain to me why? I am still learning about CLV right now and getv confuse because so many ways to calculate that

@ericandrewsclips7818 4 месяца назад

Hey! Yes at the end of the day it is just how many times a customer purchases. There are various ways to look at their retention depending on whether you sell on a subscription or not, but it's all trying to calculate the same metric = lifetime orders * profit per order. When you have a subscription customer, you can estimate lifetime using churn rates. When you have non subscription products, you need to usually use customer retention cohort tables. Does that help?

@hudzaifahhudzaifah-zv6yw 4 месяца назад

Do you have video how to use customer retention cohort?

@BenChipman-zw5mq Месяц назад

Hey Eric, I'm a little confused about the inverse churn rate that you explain at about 1:10. You say that if the churn rate is 3.1%, then the average lifetime is 32 months. Shouldn't this actually mean that all the customers will be gone after 32 months, and that the average customer lifetime would therefor be 16 months? Let me know if my thinking is flawed. LTV is feeling more complex than I expected haha

@ericandrewsclips7818 Месяц назад

No, the average is 32 months, not the maximum. The average refers to the average across all customers, so many of those customers will be higher and/or lower than 32 months. In order to fully understand why this formula works (if you don't want to just take my word), I show the full math of cohortizing a group of customers it and taking the average of the entire group vs. just using the quick formula here in this video, where you'll see they produce the identical result: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-eHi875QuVcA.htmlsi=z-IyjKOatYOOjNOJ

@ericandrewsclips7818 Год назад

Check out the full video here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-9ViZZ4MZTPs.html