Let's Talk Loyalty

#551: What We Thought We Knew About Retention and Customer Lifetime Value

Jun 19, 2024

Dan McCarthy from Emory University discusses the complexities of measuring retention and customer lifetime value. He explores differences in metrics across industries, subscription vs. non-subscription models, and the impact of free trials. The conversation challenges traditional approaches and highlights the importance of cohort-specific churn measures for evaluating business performance.

46:08

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Daniel McCarthy

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Quick takeaways

Reducing churn rates may not always indicate business advancement, especially in B2C versus B2B environments.

Cohort analysis is crucial for evaluating a business's performance and understanding customer acquisition trends across cohorts.

Deep dives

Understanding Retention, Churn, and Customer Lifetime Value

Retention, churn, and customer lifetime value are crucial factors in loyalty marketing. Churn rates and retention are extensively examined in loyalty, especially in relation to business improvement indicators. Dan McCarthy discusses how reducing churn rates may not always signal business advancement, elucidating the differences in customer behavior in B2C versus B2B environments. Measuring customer lifetime value and grasping the significance of churn and retention metrics across various industries and subscription models are vital for loyalty professionals.

Analyzing Purchase Cycles in Different Industries

01:15

Intro

3min

Retention and Churn in Loyalty Programs

8min

Exploring Loyalty Value and Personal Transition

2min

Analyzing Retention and Churn for Customer Lifetime Value

13min

Impact of Free Trials on Customer Retention and Lifetime Value

13min

Analyzing Data Holistically and Customer Lifetime Value

4min

A Conclusion and Sponsorship for Loyalty Conference

2min

Daniel McCarthy is Assistant Professor at Emory University Goizieta School of Business. In this interview, Dan unpacks several deep layers of understanding around measuring retention and customer lifetime value.

He highlights a concern that businesses state improved performance against reduced churn rates. It is not that simple. He dives into differences of retention and churn measurement across subscription and non-subscription, across different industries and even the impact of a free trial in a subscription business.

If you are in the industry of loyalty, you need to listen to Dan McCarthy’s view on measuring churn, retention and customer lifetime value.

Hosted by Amanda Cromhout

Show notes:

1) Daniel McCarthy

2) Emory University Goizieta School of Business

3) #64: Customer-Based Corporate Valuation - Daniel McCarthy of Emory University

4) #338: Covid’s Aftermath, Customer Health, and Customer-Based Forecasting with Daniel McCarthy of Emory University

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This episode is sponsored by Phaedon.

Visit their website to learn more about how they're powering the world's most beloved loyalty programs at www.wearephaedon.com