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Also, for most SaaS apps, your first month churn is typically WAY higher than your second, third and fourth. You need to simulate in order to find the true LTV,
by 3pt14159 15y ago
Also, for most SaaS apps, your first month churn is typically WAY higher than your second, third and fourth. You need to simulate in order to find the true LTV, also, be sure to include the fact that ARPU typically goes up over time as people upgrade their accounts, so account for that too.
- aaronjg 15y agoIndeed! That is why it is so important to include heterogeneity of the customer base in calculations. You tend to lose the flighty customers early so retention rates increase the longer a customer has been using the service.