Sales Tool 31

Account LTV.
What an account is actually worth over time.

What is a wholesale account actually worth over 3 years? Model LTV at different retention rates, quantify the cost of churn, and build the business case for account retention investment.

1Account Profile

Avg Year-1 Revenue ($)

Revenue Growth Rate (%/yr)

Expected annual growth on retained accounts

Gross Margin (%)

2Retention & Churn

Year-2 Retention Rate (%)

Year-3 Retention Rate (%)

3-Year Avg Retention

Account Reactivation Rate (%)

% of churned accounts eventually return

True Churn Cost per Account ($)

3Account Investment

Annual Retention Cost per Acct ($)

Samples, service, visits, co-op

Account Acquisition Cost ($)

Accounts in Active Portfolio (#)

Account 3-Year LTV-

LTV
3 Years

Churn
Cost

Retention
ROI

3-Year LTV Model

Year 1 Revenue-

Year 2 Revenue (if retained)-

Year 3 Revenue (if retained)-

Gross Revenue (3yr, if retained)-

× Gross margin-

− Retention investment (3yr)-

Net LTV (3 years)-

Churn Economics

Lost revenue (churn in Yr2)-

Replacement CAC-

Total churn cost per account-

Retention Rate Sensitivity

Ret. Rate	Yr-2 Rev	3yr LTV	vs 100%

Account LTV.What an account is actually worth over time.

Account LTV.
What an account is actually worth over time.