Free tool · 5 minutes · Customer Value & Retention Opportunity Model
What is your customer actually worth after the first purchase?
Acquisition is usually judged on the first order. Most of the commercial value arrives later. This module models customer gross profit, how quickly acquisition repays, and what a modest improvement in repeat, renewal or expansion would be worth on your own numbers.
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Which best describes the business?
This changes the questions and the way the read is constructed. Nothing else.
What this gives you
- Gross profit per order or first-year contract
- Annual and retention-implied lifetime gross profit per customer
- Acquisition payback and year-one headroom, where cost is supplied
- Modelled value of small improvements in second purchase, frequency, renewal or expansion
- A read on how dependent the business is on retention working
How the read is built
- Customer gross profit is calculated from your order or contract value, margin and repeat behaviour. Lifetime value is retention-implied, using a simple one-over-churn style calculation and labelled as such.
- Every scenario states its assumption, including that additional orders carry today's margin with no extra discounting.
- Where acquisition cost is missing, payback and headroom are shown as unavailable rather than estimated.
What it cannot tell you
- This is not a cohort-modelled LTV. Cohort behaviour, seasonality and product mix all move real lifetime value.
- Improvements in retention are modelled, not predicted. The module does not know what it would cost you to achieve them.
- No sector retention benchmarks are applied.
Customer value — common questions
- How is lifetime value calculated?
- Annual customer gross profit is extended using your repeat or renewal rate. It is a transparent retention-implied estimate, not a predictive model, and the formula is shown next to the number.
- What if acquisition cost is hard to pin down?
- Leave it blank. You still get customer gross profit and retention scenarios, and the module will tell you that payback could not be read.
- Does this replace a retention strategy?
- No. It tells you whether retention is where the commercial value sits. What to do about it is diagnostic work.
After your read
Where this usually goes next
Three specific places, depending on whether you want the thinking, the evidence or the examined version of this reading.
Read the thinking
Retention and customer value
The essays and analysis behind the questions this module asks.
See it in practice
The acquisition problem that was a retention problem
Home & interiors · £12m–£18m online revenue — what this reading looked like inside a real engagement.
Have it examined properly
The Growth Diagnostic
The diagnostic replaces the retention-implied estimate with cohort evidence, and tells you whether retention is the constraint worth funding first.
Growth Profile
Other modules that read the same system differently
Each one stands alone. Most people do one or two, then talk to us.
4 minutes
Demand
How dependent is growth on paid or concentrated demand?
5 minutes
Journey
Where is customer intent leaking?
4 minutes
Incrementality
How much confidence should you place in reported channel return?
3 minutes
Capability
Is the constraint actually organisational?
Flagship · 10 minutes
Growth Economics
Where is the biggest economic lever in the business?