Are you leaving revenue on the table when calculating how much your customers are worth to you? Venture capitalist Jason Lemkin thinks you are.
In his post on SaaStr he explains why: “standard first-order only CLTV analyses underestimate true revenue generated by customers by 50-100% in most SaaS models selling to anything larger than SMBs.”
More plainly: your actual LTV could be 2x what you think it is.
Where’s the difference come in? Second-order revenue, which results from things including your customer leaving her current company and bringing you in to a new one, and purchases made as a result of referrals from customer champions/advocates. Put simply, you automatically increase the LTV of your existing customers when you have a referral program.
Learn more: read Jason’s full post here.