📌 Method: MemberLifetimeValue
This article explains how we calculate total revenue per member over time.
How is lifetime value calculated?
Finds active members
We look at which members are still active at the end of each month.
Retrieves invoices and payments
We will deduct all purchases made by these members.
Calculates the average lifetime value
Total revenue per month divide by the number of active members.
Visualizes data
Data is displayed in an area chart so that you can follow the development over time.
Example calculation
Let's assume we calculate the lifetime value of a member group over the course of three months.
Month | Revenue from members | Number of active members | Average per member |
January | 50.000 kr. | 100 | 500 kr. |
February | 48.000 kr. | 95 | 505 kr. |
March | 52.000 kr. | 110 | 472 kr. |
We sum up the total revenue:
50.000+48.000+52.000=150.000 kr.50.000 + 48.000 + 52.000 = 150.000 \text{ kr.}50.000+48.000+52.000=150.000 kr.
We average per member:
150.000305=491 kr. (average per member)\frac{150.000}{305} = 491 \text{ kr. (average per member)}305150.000=491 kr. (average per member)
Why is this important?
The lifetime value tells you how much a customer contributes to revenue on average. It provides an indicator of long-term earnings and whether it's worth investing in member retention.
💡 Result: A graph showing the average revenue per member over time.
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