Know your Customer Lifetime Value and make better decisions
Customer Lifetime Value is an essential business metric that is often overlooked by small businesses. However, knowing this data allows us to make better marketing decisions and manage our expenses properly.
Customer Life Time Value (LTV) is the monetary value of a customer relationship based on projected future cash flows from that relationship.
Simply put, when a new member signs up as a member with us, this is the total dollar amount that we can expect them to pay us until they quit.
This information is much more useful compared to the attrition rate that is often thrown around in industries today.
The MyStudio platform automatically calculates your Customer Lifetime Value and places this right on your control panel.
The data above is from our newest location that opened on June 4th of this year. As more payment data is collected in MyStudio over time, the Customer Lifetime Value becomes more accurate for us.
Let's take a look at the data that is currently available for this location and how it helped us to make better marketing decisions.
- Our after school program is giving us a current Customer Life Time Value of 4 times higher than our Children & Family Martial Arts ($1,467 compared to $364).Knowing this, we've decided to allocate 50% of our total marketing dollars toward getting new members into this program..
- Our Tiny Tigers program is giving us an LTV that is 1.5 times higher than our Children & Family Martial Arts. Meaning parents of children who are 4+5 years old are deciding to pay us more upfront (remember this studio has only been opened 4.5 months old).Since there are limited activities for this age group, we chose to focus our Google Ads to target parents with children ages 3-6 for our Martial Arts program.
These are two examples on how you can effectively use this data that is easily available to you on the MyStudio platform.