Mini Episode: Why LTV in Shopify and TripleWhale is Wrong

Episode Summary

In this mini episode of the Free to Grow CFO podcast, Jon Blair discusses the concept of LTV (Lifetime Value) in the context of DTC brands, emphasizing its importance in measuring customer value over time. He highlights common misconceptions about LTV, particularly the confusion between LTV and LTR (Lifetime Revenue), and stresses the need to measure LTV in margin dollars rather than revenue. Jon also explains the significance of time-bound LTV and its role in assessing profitability against customer acquisition costs (CAC).

Key Takeaways:

-LTV is the cumulative value that a customer represents to your brand over time.

-LTV should be measured in margin dollars, not total revenue.

-LTV must be time-bound, expressed in specific time frames.

Episode Links

Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/

Free to Grow CFO - https://freetogrowcfo.com/

Transcript

00:00 Understanding LTV: Definition and Importance

03:14 Measuring LTV: Common Mistakes and Correct Approaches

04:59 Using LTV for Business Decisions: Profitability Assessment