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margin-top: 0 !important; } /* Post grid fix */ .nectar-post-grid .nectar-post-grid-item .content .meta-category a{ font-size: 13px !important; line-height: 1 !important; font-size: 12px !important; display: inline-block !important; margin-bottom: 10px !important; } /* Increase intro text */ .bm_intro_p p{ font-size: 18px !important; } /* Logo rows */ .bm-logo-rows .img-with-aniamtion-wrap { width: 33% !important; padding: 20px !important } .bm-logo-rows { padding-left: unset !important } /* Meet the team */ .bm-meet-team > .col.span_12 > .vc_col-sm-8 .wpb_row .row_col_wrap_12_inner .vc_col-sm-2{ width: 50%; margin: 0 !important; } /* About Carousel */ .bm-award-carousel .nectar-flickity:not(.masonry) .flickity-slider .cell { padding: 20px !important; } /* About Page Team */ .bm_team_titles .wpb_row.vc_row-fluid.vc_row.inner_row { padding: 0 !important; margin-bottom: 0 !important; } } /** Desktop Only **/ @media screen and (min-width: 901px ){ /* BM Flex 2 Cols */ .bm-flex-2-cols .wpb_wrapper{ display: flex; flex-wrap: wrap; justify-content: space-between; } .bm-flex-2-cols .img-with-aniamtion-wrap { width: 19%; } /* Team Members */ .bm-meet-team .wpb_wrapper .wpb_text_column { /*margin-bottom: 0 !important;*/ } .bm-meet-team__text { margin-top: 20px !important; font-size: 51px !important; line-height: 1.1em !important; } .bm-desktop { display: block !important; } .bm-mobile { display: none !important; } } /*** END:Cals Mobile Edits ***/ /* * ----- QUFORM Radio + Check boxes */ .quform-options-style-button .quform-option-label { background-color: #fff; border-color: #000; border-radius: 5px; } .quform-options-style-button .quform-field-radio:checked + label { background-color: #ffd74b; border-color: #000; border-radius: 5px; } .quform-options-style-button .quform-option-label:hover { background-color: #ffd74b; border-radius: 5px; } .quform-option-text { color: #000; } .quform-options-style-button .quform-field-checkbox:checked + label { background-color: #ffd74b; border-color: #000; } /* * ------ INPUT FIELDS */ .quform-field-size-fat > .quform-input > .quform-field-text, .quform-field-size-fat > .quform-input > .quform-field-email, .quform-field-size-slim > .quform-input > .quform-field-textarea { border-color: #000; } .quform-field-size-fat > .quform-input > .quform-field-text:hover, .quform-field-size-fat > .quform-input > .quform-field-email:hover { border-color: #ffd74b; } /* * ------ ERROR FIELDS */ .quform-error > .quform-error-inner { background-color: #ececec; color: #000; border-left: 5px solid #ffd74b; } /* * ------ PROGRESS BAR */ .quform-page-progress { margin-bottom: 25px; } .quform-page-progress-bar { color: #ffd74b; background-color: #000; border-radius: 5px; } /******/ /*#header-outer nav>ul>.megamenu.nectar-megamenu-menu-item.width-75>ul { width: 90em !important; }*/ #header-outer .nectar-menu-label:before { background-color: #ffffff; opacity: 0.27; } /* * ----- Portfolio Next button */ .parallax-layer-wrap { border-radius: 20px; } /*******/ /* * ----- Contact form 7 styling */ .wpcf7-form .wpcf7-not-valid-tip { color: #000 !important; font-weight: 600; } /*******/ /* * ----- Case study background display none */ .bm_case_study .nectar-post-grid-wrap[data-style=content_under_image] .nectar-post-grid .img-wrap.nectar-lazy-wrap { background-color: rgb(0 0 0 / 0%); } /* * --- background of text */ .nectar-post-grid-wrap[data-style=content_under_image] .nectar-post-grid[data-text-color=light] .img-wrap.nectar-lazy-wrap { background-color: transparent; } /*******/ /* * ----- Flickity page dots - hide */ .bm_flickity .flickity-page-dots { display: none; } .bm_flickity .nectar-flickity.nectar-carousel[data-column-padding="50px"] .inner-wrap { padding: 0 0 50px 0 !important; } /********/ /* * ----- BLOG Styling */ /*--- Social share on blog ---*/ body .nectar-social.fixed a i, #ajax-content-wrap .nectar-social.fixed a i { color: #000; } /* --- category tag on all blog posts - individual posts ---*/ .featured-media-under-header__cat-wrap .meta-category a:not(:hover) { background-color: #ffd74b; color: black; } /*--- on hover of blog post tag ---*/ .featured-media-under-header__cat-wrap .meta-category a:hover { color: #000; background-color: #d0b03e; } /*--- blog category on blog page ---*/ .masonry.material .masonry-blog-item .meta-category a { line-height: 16px; color: #45433f !important; } /*--- blog post titles on blog page only ---*/ /*--- page numbers on blog ---*/ #pagination span.page-numbers.current { color: #000 !important; } #pagination span.page-numbers.current { color: #000 !important; } body #pagination .page-numbers.next, body #pagination .page-numbers.prev { background-color: #181818 !important; color: #fff !important; } body #pagination>a.page-numbers:hover, body #pagination>a:hover { background-color: #1e1e1e !important; } /*--- font size of page numbers ---*/ body #pagination>a { font-size: 15px !important; } body #pagination>span.page-numbers.current { font-size: 15px !important; } /**/ /* * -----All cta underlines to yellow */ .bm_cta_underline .link_text:after { border-color: #FFD74B !important; } /*--- start a project underline ---*/ .bm_underline_link a.active.el-in-view h3 { border-bottom: 4px solid #f3f3f3 !important; width: fit-content; } /**/ /* * -----Main body text for stand out sections */ .bm_intro_p p { font-size: 1vw; line-height:1.7em; } /* * -----Subtitles for all titles */ .bm_h6_subtitle em { padding: 0 0 2px 0 !important; text-transform: uppercase; } /**/ /* * -----Selection to yellow */ ::-webkit-selection { color: #000; background-color: #FFD74B; } ::selection { color: #000; background-color: #FFD74B; } * { -webkit-user-select: text; -moz-user-select: text; -ms-user-select: text; } /**/ /* * -----Scrollbar styling */ body::-webkit-scrollbar { width: 8px; } body::-webkit-scrollbar-track { background: #181818; } body::-webkit-scrollbar-thumb { background-color: #FFD74B; border-radius: 2px; } /**/ /* * -----CTA Underline to yellow */ .bm_cta_underline .link_text:after { border-color: #FFD74B !important; } /**/ /* * -----Inline Bird Images - Main titles */ .nectar-text-inline-images--animation_circle_reveal .nectar-text-inline-images__marker.animated-in img { animation: nectarClipReveal 4s cubic-bezier(0.13,0.73,0.29,0.88) forwards; } /**/ /* * -----Lets Quote Yellow Button */ .bm_quote_button .menu-title-text span { color: #000; } #header-outer .menu-item-113 > a { color: #000!important; } /**/ /* * -----Copyright - Mobile */ #slide-out-widget-area.fullscreen-inline-images.open .bottom-meta-wrap { padding: 0px 8%; } /**/ .nectar-scrolling-text-inner__text-chunk { opacity: 1; } .single-portfolio .nectar-scrolling-text-inner__text-chunk { color: #737373 !important; } /** Remove menu image on mobile **/ @media screen and (max-width: 999px) { .bm-menu-image { display: none !important } } /* * case study testimonial */ @media only screen and (max-width: 999px) { .bm_bold_testimonial .nectar_single_testimonial[data-style="bold"] p { font-size: 25px; line-height: 35px; } } @media only screen and (max-width: 1601px) and (min-width: 1200px) { .bm_bold_testimonial .nectar_single_testimonial[data-style="bold"] p { font-size: 30px; line-height: 40px; } } @media only screen and (min-width: 1920px){ .bm_bold_testimonial .nectar_single_testimonial[data-style="bold"] p { font-size: 45px; line-height: 55px; } } .quform-form-11 .quform-element-submit, .quform-form-11 .quform-button-submit{ margin: 0 } .quform-form-11 .quform-button-text { color: black !important; } .quform-form-11 input { border: 1px solid #FBD74B !important; padding: 11.6px !important; } .quform-form-11 .quform-label { top: 12px !important; left: 12px !important; } .quform-form-11 .quform-label .quform-label-text { color: #ffffff99 !important; text-transform: unset !important; } </style> <noscript><style> .wpb_animate_when_almost_visible { opacity: 1; }</style></noscript></head><body 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<div class="col span_12 section-title blog-title"> <h1 class="entry-title">LTV or Lifetime Value</h1> </div> </div> <div class="row"> <div class="post-area col span_9" role="main"> <article id="post-13784" class="post-13784 glossary type-glossary status-publish glossary-cat-marketing glossary-cat-seo"> <div class="inner-wrap"> <div class="post-content" data-hide-featured-media="1"> <div class="content-inner"><div id="fws_67b6771e631b3" data-column-margin="default" data-midnight="dark" class="wpb_row vc_row-fluid vc_row" style="padding-top: 0px; padding-bottom: 0px; "><div class="row-bg-wrap" data-bg-animation="none" data-bg-animation-delay="" data-bg-overlay="false"><div class="inner-wrap row-bg-layer" ><div class="row-bg viewport-desktop" style=""></div></div></div><div class="row_col_wrap_12 col span_12 dark left"> <div class="vc_col-sm-12 wpb_column column_container vc_column_container col no-extra-padding inherit_tablet inherit_phone " data-padding-pos="all" data-has-bg-color="false" data-bg-color="" data-bg-opacity="1" data-animation="" data-delay="0" > <div class="vc_column-inner" > <div class="wpb_wrapper"> <div class="wpb_text_column wpb_content_element " > <div class="wpb_wrapper"> <p><strong>Term:</strong> LTV or Lifetime Value</p> <p><strong>Definition:</strong> LTV, or Lifetime Value, is a prediction of the nett profit attributed to the entire future relationship with a customer.</p> <p><strong>Alternative Names:</strong> Customer Lifetime Value (CLV), Life Time Value, Client Lifetime Value</p> <hr /> <p> </p> <p><strong>Expanded Explanation:</strong> LTV measures the <a href="https://bird.co.uk/glossary/tov/" target="_blank" class="glossary-only-link">total revenue</a> a business can reasonably expect from a single customer account. It considers a customer’s revenue value and compares that number to the company’s predicted customer lifespan. Businesses use this metric to identify significant customer segments that are the most valuable to the company.</p> <p><strong>Benefits or Importance:</strong> Understanding LTV helps companies make decisions about sales, marketing, product development and customer support. It provides insights into how much value different customers bring over time, allowing businesses to optimise their strategies to enhance profitability.</p> <p><strong>Common Misconceptions or Pitfalls:</strong> A common misconception is that increasing customer acquisition will always increase LTV. However, acquiring customers who do not have a high LTV may actually cost a company more in the long run. A pitfall to avoid is focusing solely on LTV without considering the cost of customer acquisition (CAC).</p> <p><strong>Use Cases:</strong> LTV can be used to tailor marketing strategies, predict future revenue streams, segment customers and determine the effectiveness of promotions, such as loyalty programmes, for example. It’s also a crucial metric for businesses looking to raise funds or for valuation purposes.</p> <p><strong>Real-world examples:</strong></p> <p>Let’s consider a subscription-based business such as a streaming service. If a customer subscribes for an average of three years (36 months) and pays 拢20 a month, their LTV would be:</p> <p>拢20 (monthly payment) x 36 (months) = 拢720</p> <p>This means the streaming service can expect to generate 拢720 in revenue over the lifetime of their relationship with that customer.</p> <p><strong>Calculation or Formula:</strong></p> <p>The basic formula to calculate LTV is:</p> <div><span class="katex-eq" data-katex-display="false"> LTV = ARPU * Customer Lifespan </span></div> <p>Where:</p> <p>– LTV is the Lifetime Value,<br /> – ARPU is the Average Revenue Per User,<br /> – Customer Lifespan is the average time a customer continues using your product/service.</p> <p>For instance, if the ARPU is 拢50 and the average customer lifespan is 3 years:</p> <div><span class="katex-eq" data-katex-display="false"> LTV = 拢50 * 3 = 拢150 </span></div> <p><strong>Best Practices or Tips:</strong></p> <ul> <li>Regularly calculate and monitor LTV to keep abreast of changes and trends.</li> <li>Focus on improving customer retention and increasing the <a href="https://bird.co.uk/glossary/average-order-value/" target="_blank" class="glossary-only-link">average purchase value</a> to boost LTV.</li> <li>Consider the cost of customer acquisition (CAC) when using LTV to make business decisions. Aim for a CAC to LTV ratio of 1:3 as a healthy benchmark.</li> <li>Use customer segmentation to identify variations in LTV among different client groups.</li> </ul> <p><strong>Limitations or Considerations:</strong> LTV is a prediction, not a certainty. This is because it’s based on averages. Therefore, it may not accurately represent every customer’s value, particularly in businesses with a diverse customer base.</p> <p><strong>Comparisons:</strong> LTV is often compared to Customer Acquisition Cost (CAC). While LTV estimates the total value a customer brings to the business, CAC calculates the cost to acquire that customer. The LTV:CAC ratio is a critical metric for assessing the profitability of a business.</p> <p><strong>Historical Context or Development:</strong> The concept of LTV has been around for several decades and is rooted in direct response marketing and catalogue sales. With the growth of online businesses and digital marketing, LTV has become a vital metric for large businesses and SMEs alike.</p> <p><strong>Resources for further learning:</strong></p> <ul> <li><a href="https://hbr.org/webinar/2015/03/the-value-of-customer-experience-quantified">Harvard Business Review – The Value of Customer Experience, Quantified</a></li> <li><a href="https://www.paddle.com/resources/customer-lifetime-value" target="_blank" rel="noopener">ProfitWell – The ultimate guide to LTV</a></li> <li><a href="https://www.shopify.co.uk/encyclopedia/customer-lifetime-value-clv" target="_blank" rel="noopener">Shopify – Customer Lifetime Value (CLV)</a></li> </ul> <p><strong>Related Services:</strong></p> <ul> <li style="list-style-type: none;"> <ul> <li>Customer Segmentation: Our team can help you segment your customers effectively to identify those with the highest LTV, enabling more targeted marketing and product development strategies.</li> <li>Sales and Marketing Strategy: We can help you design and implement strategies to increase your customer LTV, such as improving customer retention and boosting average purchase value.</li> <li>Data Analysis and Reporting: Our data experts are able to provide regular reports and insights on your LTV and other key metrics, allowing you to make data-driven decisions.</li> <li>Customer Retention Strategies: We can help you build effective customer retention strategies to increase your average customer lifespan, thereby boosting your LTV.</li> </ul> </li> </ul> <p><strong>Related Terms:</strong> Average Revenue Per User (ARPU), Customer Acquisition Cost (CAC), Customer Retention, Customer Segmentation</p> </div> </div> </div> </div> </div> </div></div></div> </div> </div> </article> </div> <div id="sidebar" data-nectar-ss="1" class="col span_3 col_last"> <div id="block-5" class="widget widget_block"><div class="wp-block-group"><div class="wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow"><h2 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data-padding-pos="all" data-has-bg-color="false" data-bg-color="" data-bg-opacity="1" data-animation="" data-delay="0" > <div class="vc_column-inner" > <div class="wpb_wrapper"> <div class="wpb_text_column wpb_content_element vc_custom_1655136104869" > <div class="wpb_wrapper"> <h5><strong>Careers</strong></h5> </div> </div> <div class="wpb_text_column wpb_content_element " > <div class="wpb_wrapper"> <p>We are always looking for talented people to join the team. Scan our careers page to find out about working for us and see if there is an opportunity to become part of the flock.</p> </div> </div> <div class="divider-wrap height_tablet_15px height_phone_15px " data-alignment="default"><div style="height: 15px;" class="divider"></div></div><div class="nectar-cta alignment_tablet_default alignment_phone_default display_tablet_inherit display_phone_inherit font_size_desktop_18px " data-color="default" data-using-bg="false" data-display="block" data-style="underline" data-alignment="left" data-text-color="std" ><h6> <span class="link_wrap" ><a target="_blank" class="link_text" role="button" href="/careers/">Careers</a></span></h6></div> </div> </div> </div> <div class="vc_col-sm-3 wpb_column column_container vc_column_container col child_column no-extra-padding inherit_tablet inherit_phone " data-padding-pos="all" data-has-bg-color="false" data-bg-color="" data-bg-opacity="1" data-animation="" data-delay="0" > <div class="vc_column-inner" > <div class="wpb_wrapper"> <div class="wpb_text_column wpb_content_element vc_custom_1655133985425" > <div class="wpb_wrapper"> <h5><strong>Need Support?</strong></h5> </div> </div> <div class="wpb_text_column wpb_content_element vc_custom_1657718139978 bm_para_margin" > <div class="wpb_wrapper"> <p>On our support plan? feel free to submit a ticket or give us a call during business hours.</p> <p><i class="icon-tiny iconsmind-Consulting accent-color"></i> 09.00 am – 17.00 pm</p> </div> </div> <div class="nectar-cta alignment_tablet_default alignment_phone_default display_tablet_inherit display_phone_inherit font_size_desktop_18px " data-color="default" data-using-bg="false" data-display="block" data-style="underline" data-alignment="left" data-text-color="std" ><h6> <span class="link_wrap" ><a target="_blank" class="link_text" role="button" href="/cdn-cgi/l/email-protection#21525451514e535561434853450f424e0f544a"><span class="__cf_email__" data-cfemail="e5969095958a9791a5878c9781cb868acb908e">[email protected]</span></a></span></h6></div> </div> </div> </div> <div class="vc_col-sm-3 wpb_column column_container vc_column_container col child_column no-extra-padding el_spacing_0px bottom_margin_tablet_0px bottom_margin_phone_0px inherit_tablet inherit_phone " data-t-w-inherits="small_desktop" data-padding-pos="left" data-has-bg-color="false" data-bg-color="" data-bg-opacity="1" data-animation="" data-delay="0" > <div class="vc_column-inner" > <div class="wpb_wrapper"> <div class="wpb_text_column wpb_content_element vc_custom_1655135059463" > <div class="wpb_wrapper"> <h5><strong>Quick Links</strong></h5> </div> </div> <div class="wpb_text_column wpb_content_element " > <div class="wpb_wrapper"> <p><a href="/nest/">Nest</a><br /> <a href="/seo-portal/">Marketing Portal </a><br /> <a href="/glossary/"><span class="menu-title-text">Digital Marketing Glossary</span></a><br /> <a href="https://bird.co.uk/london/">Digital Marketing Agency London</a><br /> <a href="https://bird.co.uk/essex/">Digital Marketing Agency Essex</a></p> </div> </div> </div> </div> </div> <div class="vc_col-sm-3 wpb_column column_container vc_column_container col child_column no-extra-padding inherit_tablet inherit_phone " data-padding-pos="all" data-has-bg-color="false" data-bg-color="" data-bg-opacity="1" data-animation="" data-delay="0" > <div class="vc_column-inner" > <div class="wpb_wrapper"> <div class="wpb_text_column wpb_content_element vc_custom_1655135553875" > <div class="wpb_wrapper"> <h5><strong>Legal</strong></h5> </div> </div> <div class="wpb_text_column wpb_content_element " > <div class="wpb_wrapper"> <p><a href="/wp-content/uploads/terms.pdf" target="_blank" rel="noopener">Terms & Conditions</a><br /> <a href="https://www.nominet.uk/uk-domains/policies/" target="_blank" rel="noopener">Nominet Terms</a><br /> <a href="/privacy-policy/">Privacy Policy</a></p> </div> </div> </div> </div> </div> </div></div> </div> </div> </div> </div></div> <div id="fws_67b6771e87e22" data-column-margin="none" data-midnight="light" class="wpb_row vc_row-fluid vc_row vc_row-o-equal-height vc_row-flex vc_row-o-content-middle bm-footer__content bottom_margin_2pct top_padding_phone_50px" style="padding-top: 0px; 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