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Customer Lifetime

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Customer Lifetime

Customer lifetime is the average length of time a customer keeps paying you before they churn, usually expressed in months. You can estimate it as one divided by your monthly churn rate: a 5% monthly churn implies an average lifetime of twenty months. It's the time dimension that turns a monthly subscription into a total relationship value.

This number quietly drives the whole economics of a subscription business, which is why a founder should know it cold. It's the multiplier inside lifetime value, so a small improvement in retention stretches lifetime and lifts the total revenue from every customer you've already paid to acquire. It also sets the ceiling on what you can afford to spend on acquisition: if customers stay twenty months, you can invest far more to win them than if they stay four. Lengthening customer lifetime, through better onboarding, stickier value, and expansion, is often cheaper than winning new customers.

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