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He botches the math. 20% monthly churn means you have to replace your customer base 2.4 times over a year, not 8 times. But the conclusion is the same: CAC > LT
by tlb 11y ago
He botches the math. 20% monthly churn means you have to replace your customer base 2.4 times over a year, not 8 times. But the conclusion is the same: CAC > LTV.
- shasta 11y agoI assume his formula (1+monthly_churn)^12 – 1 was based on a misremembering or misunderstanding of annual churn = 1 - (1-monthly_churn)^12.
- andrew_null 11y agoOP here. You're right, I'll update for math.