Retention

LTV

Measurement

Academic
Effort: high
Volume: medium

Myth:Early cohort LTV projections are reliable planning inputs.

Evidence:LTV curves flatten unpredictably; projections built on the first weeks of a cohort routinely overstate long-run value.

The Nuance

Buy-till-you-die models with sufficient history are far more stable than linear extrapolation.

The Receipt

Counting Your Customers the Easy Way

Fader, Hardie & Lee, Marketing Science · 2005 · Academic

ContestedConsensus 5–7/10 — test before you scale
Impact8/10
Consensus7.2/10
Evidence70/100
Add to a Crib Sheet

Channels: analytics · lifecycle

Related Cribs

Onboarding

Lifecycle

Solid

Myth:Churn is a late-lifecycle problem.

Evidence:Most avoidable churn is set in the first sessions: users who reach a core activation action early retain at multiples of those who do not.

Impact8.7/10
Consensus8/10

Unit Economics

Economics

Under watch
Contested

Myth:Growth is an acquisition problem.

Evidence:Modest retention improvements compound through the customer base and typically move profit more than equivalent acquisition spend, because retained revenue carries no CAC.

Impact8.6/10
Consensus7.8/10

Loyalty Economics

Loyalty

Solid

Myth:Loyal customers cost less to serve, pay more, and evangelize for free.

Evidence:Studying four companies over 16 months, Reinartz & Kumar found only a modest correlation between customer longevity and profitability: long-tenure customers expected discounts, were no cheaper to serve, and were not reliably the best word-of-mouth sources.

Impact8.5/10
Consensus8.2/10

WOM Economics

Word of Mouth

Solid

Myth:Word of mouth is a soft bonus next to paid media.

Evidence:Vector-autoregression modelling of a social network's growth shows WOM referrals have substantially longer carryover effects and substantially higher response elasticities than traditional marketing actions - and a referral's value can be monetized from the downstream ad revenue a new member generates.

Impact8/10
Consensus8/10

Loyalty

Programs

Contested

Myth:A points programme will increase loyalty.

Evidence:Most loyalty programmes reward behaviour that would have happened anyway; measured incremental effects are small and skew to already-heavy buyers.

Impact7.9/10
Consensus7.6/10

Crib of the Week

One crib in your inbox every Monday. No spam, unsubscribe anytime.