📌 Method: MemberLifetimeValue
This article explains how we calculate the total revenue per member over time.
How is Lifetime Value Calculated?
Identifying Active Members
We examine which members are still active at the end of each month.
Retrieving Invoices and Payments
We extract all purchases made by these members.
Calculating the Average Lifetime Value
Total revenue per month divided by the number of active members.
Visualizing the Data
Data is displayed in an area chart to track trends over time.
Example Calculation
Let’s assume we calculate the lifetime value for a membership group over three months.
Month | Revenue from Members | Active Members | Average per Member |
January | 50,000 DKK | 100 | 500 DKK |
February | 48,000 DKK | 95 | 505 DKK |
March | 52,000 DKK | 110 | 472 DKK |
We sum up the total revenue:
50,000 + 48,000 + 52,000 = 150,000 DKK
We calculate the average per member:
150,000 ÷ 305 = 491 DKK (average per member)
Why is this Important?
Lifetime value indicates how much a customer contributes to revenue on average. It provides an indicator of long-term profitability and whether it is worth investing in member retention.
💡 Result: A graph showing the average revenue per member over time.
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