Can I calculate LTV from number of total members and number of current members


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I'm trying to calculate average customer lifetime value of a membership site.

The data available to me is unfortunately either incomplete or very simplistic (or else I don't know how to extract the information needed).

Let's say I can find the total number of signups the site has ever had, plus the number of current members, how can deduct from that the average lifetime of a member?

Subscriptions Memberships Customer Value

asked Jun 28 '11 at 06:27
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Eoinoc
110 points
  • Do you know how long the site has been around? – Joel Spolsky 9 years ago

1 Answer


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Not really - you're missing a lot of key information. Most importantly, you don't know how long people stay around because you don't know when each person came and left.

Take a simple example and you'll see why:

  • imagine that the site was created January 1st
  • the site has been in existence for 1 year
  • now it is December 31st
  • it has only ever had 3 members
  • it now has 1 member

Both of these are equally possible:

  • one person joined in March for a day, one person joined in June for a day, and the current member joined yesterday and is already planning to quit. -> Average customer lifetime is 1 day
  • Three people joined on January 1st. Two of them just quit, but two more will join tomorrow. -> Average customer lifetime is 1 year.

This is a simplistic example of course but multiply all the numbers by 1000 and it may be more realistic.

answered Jun 28 '11 at 11:32
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Joel Spolsky
13,482 points

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