Your churn is a band. What does that do to LTV?
With a young cohort, monthly churn anywhere from 2% to 5.5% is consistent with the data, and that band is the difference between two businesses. Draw it honestly and LTV becomes a range with a P5.
SaaS Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
What Is a Customer Really Worth?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Twenty thousand simulated customers:
- LTV, mean
- $846
- LTV, P5
- $652
- LTV, P95
- $1,068
If acquisition costs $700, the mean says yes and the P5 says you might be buying customers at a loss: that tension is your actual state of knowledge, invisible in a point-estimate LTV. As renewal data lands, narrow the churn band and watch the range tighten.
The model
A closed-form 24-month LTV: ARPU Normal around $64, gross margin 82%, churn uniform between 2% and 5.5%, with retained months summed geometrically in one formula.
| Monthly churn | uniform 2%-5.5% |
| ARPU | Normal($64, $7) |
| Gross margin | 82% |
| 24-month LTV | simulated |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- The lift is real. Is it real for every segment?Did the New Onboarding Move Activation?
- What does hiring now cost you next January?What Three Hiring Plans Cost
- Your traffic is fixed. What lift can it even see?What Lift Could We Even Detect?
- Do the service credits or the churn cost you more?What Would an Outage Cost Us?
- Commit to the servers or rent them by the hour?Which Instance Mix Holds the Load for the Least Money?
- Is the migration in trouble, or just early?Buffer the Migration, Not the Tasks
Every model like this one, and the method behind them: Monte Carlo simulation.