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One important thing LTV misses is payback period. E.g. due to very low churn your LTV could potentially be huge but the value would take many years to realise,
by nickfzx 11y ago
One important thing LTV misses is payback period. E.g. due to very low churn your LTV could potentially be huge but the value would take many years to realise, depending on your cash reserves CAC spending well below LTV still may not be economical if it takes too long to realise the ROI.
- cllaudiu 11y agoAgree with you here. For my previous start-up I used to calculate LTV only based on people that churned. Knowing your LTV is much higher can only be great, at least as long as you can work with a CAC/LTV value.