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Lifetime value

Hi Warrior,

Lifetime value.

This is the total worth of purchases your customers will make in your business for the duration of your relationship with them.

So, this is a figure you want to keep track of and increase.

But the question is

How do you increase your customer's lifetime value?


Transition to a recurring revenue business model.

Because the longer your customers remain as customers

The higher their lifetime value is to your business.

My friend, At the same time, if you raise your prices at least once in a recurring revenue model.

The lifetime value of your customers will get even higher.

Let's use HubSpot as an example to explain the idea.

In 2012, HubSpot began recognizing that more people were getting into the software and CRM-related industry.

In other words, they realized they were no longer the only players in town.

So, HubSpot decided to switch things up.

By 2013, they increased their monthly fee from $429 to $583.

You would think that because of the price hike, people would begin to leave HubSpot.

But that's far from what happened.

HubSpot's existing customers stayed.

They were willing to pay a higher fee to continue getting the same quality service from the company.

And here's the kicker:

Based on their increased monthly recurring value

The lifetime value of a single client jumped to $23,075.

For every $6K to acquire a customer, they earn over $23K.

By increasing their monthly fee

HubSpot came from an almost breakeven point in their business to a much higher revenue position.

You can only achieve this if you switch to a recurring revenue model.

And proceed to raise prices as soon as it is necessary.

If you need more tips on how to raise your customers' lifetime value and overall profitability

- Kirk

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