1/ Every successful entrepreneur knows customer lifetime value (CLV) is the difference between the present value of the cash flows a customer generates over his or her lifetime and the cost to acquire the customer. This applies to my hamburger example here or a SaaS business.
https://twitter.com/infinitel88ps/status/1397551984811462656
2/ "A company expecting $500 in lifetime cash flow from a customer who cost $300 to acquire adds $200 to its value.
Customer NPV = PV of lifetime customer cash flows – acquisition costs." Mauboussin
The analysis is about cash flow and not GAAP earnings. hurricanecapital.files.wordpress.com/2015/02/the-ec…
Customer NPV = PV of lifetime customer cash flows – acquisition costs." Mauboussin
The analysis is about cash flow and not GAAP earnings. hurricanecapital.files.wordpress.com/2015/02/the-ec…
3/ CLV is a particularly important tool today because: 1) customer acquisition costs happen up front; and 2) GAAP requiring that the cost of intangible assets be expensed rather than capitalized makes "earnings" a potentially misleading way to determine the value of a business.
4/ "LTV, when used correctly, can be a good tactical tool for monitoring and comparing like-minded variable market programs, especially across channels. But like any model, its proper use is entirely dependent on the assumptions used in that model." abovethecrowd.com/2012/09/04/the…
5/ Customer based corporate valuation (CBCV) builds on CLV and "allows investors to build a model, based on the drivers of customer value from the bottom up, that generates a warranted stock price." Value of a business = sum of present and future customers.morganstanley.com/im/publication…
6/ CBCV helps unlock how individual customer behavior drives the top line.
Four interlocking submodels of how each customer of a firm will behave are created which can produce better forecasts of future revenue streams and the value of a business. hbr.org/2020/01/how-to…
Four interlocking submodels of how each customer of a firm will behave are created which can produce better forecasts of future revenue streams and the value of a business. hbr.org/2020/01/how-to…
7/ I tried in this Tweetstorm to describe CBCV as simply as possible, but not too simply. I thought about what to say a lot before I wrote it. Even if I failed, you have citations in the Mauboussin/Callahan paper linked above to read. Here's another storm:twtext.com/article/127709…
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