Sharath Bulusu, Head of Products at Myntra speaks about 'The criticality of Customer LTV' at inDecode meetup

1. Optimizing for
LTV
Sharath Bulusu

2. LTVis simple

3. LTV
=
revenue per user per time
x
user lifetime
-
customer user cost

4. LTV
=
average revenue per user per time
x
expected user lifetime
-
average user acquisition cost

5. LTVis not simple

6. Averages are misleading
(and the preceding slide has 3 of them)

7. LTV
=
average revenue per user per time
x
expected user lifetime
-
average user acquisition cost

8. average revenue per user per time
• how many product / service categories do you
offer?
• do you attract different user types in different
seasons?
• how much does purchase frequency, volume &
value vary over time?

9. expected user lifetime
• expected user lifetime is easy
• 1 / average churn rate
• are churn rates really constant?

10. average user acquisition cost
• easy. Marketing spend / total customers acquired
• or not.
• do you know your acquisition cost by channel?
• do you use channels that have varying seasonal
cost?
• how competitive are your most important channels?

11. some recommendations
• don’t fall for automated, generic reporting
• build your LTVreports the hard way
• understand your acquisitions channels deeply
• understand churn, acquisition stats by (time)
cohort

12. what I didn’t talk about
• how much does it cost you to retain customers?
• what is your cost of capital?
• … and a lot more