Customer Lifetime Value and the Subscription Economy

"Customer Lifetime Value and the Subscription Economy" by Phani Nagarjuna is an interesting article about the concept that a customer has a quantifiable lifetime value—first considered in the magazine industry's subscription-based revenue system. "In today's always-connected, data-saturated economic system," writes Nagarjuna, "business models have become the mainstay beyond just magazines and streaming video services." He continues that "every business today" has a reason to consider its customers as continuing streams of revenue "rather than their individual, one-and-done purchases." Read his article as you contemplate how to address the lifetime value of your customers.

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In our digital world, subscription services are more complicated. Specifically, a business’s costs, benefits and value of subscriptions are more complex. It’s no longer as simple as multiplying the cost of the subscription by the number of months and subtracting the costs associated with acquiring the customer and publishing and delivering the magazine. Think about it: ALL of those methods have changed! A customer’s Lifetime Value (LTV) is multifaceted—and it “represents the very financial lifeblood of any business organization trying to succeed in today’s 24/7 digital world,” writes Phani Nagarjuna. He adds that according to predictions by Gartner, Inc., “virtually all new entrants and 80% of existing vendors will offer some form of a subscription-based business model by 2020.” Read Nagarjuna’s article, “Customer Lifetime Value and the Subscription Economy” for a deeper understanding of LTV. An updated understanding of your customer’s value is foundational to your marketing approach and business in general.

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