What Doesn t Work

What Doesn’t Work

• Computing LTV using complex formulas that your top management does not understand. If your management doesn’t understand exactly how you developed it, it will have no confidence in it and will not use it profitably.

• Looking at LTV numbers by themselves. An LTV number by itself is meaningless. Its most important use is in calculating whether proposed marketing programs will increase or decrease lifetime value.

• Spending resources on getting an exact lifetime value number. LTV is a future number. The future has so many unknown factors that you should use LTV as a rough guide: Do this, and don’t do that. That is all it is good for.