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Rouillie Wilkerson
10,419 PointsWhat is our net LTV if we have: a monthly ARPU of $10, a gross monthly churn rate of 12%, and COGS of 10%?
I passed the quiz, but missed this one. What is the answer? The formula that's not "flawed"? What am I missing! Please walk me through this as follows:
"What is our net LTV if we have: a monthly ARPU of $10, a gross monthly churn rate of 12%, and COGS of 10%? Round your number to the nearest whole dollar (do not include any cent values): $_____"
3 Answers
Sean King
5,144 PointsYour attrition rate is 12% and you have a profit percentage of 90% (keep in mind we want net here). In a simple sense, you should be able to reduce this to (1/MCR)*(1-COGS)*ARPU.
Reality isn't as simple, but that can get you close.
Rouillie Wilkerson
10,419 PointsThanks, I'm going to go back in and run both methods. I just have to get this!