Calculate CLV With Margin, Not Vanity Revenue

A customer pays $50 per month and stays 12 months. The team says CLV is $600, but variable product cost, support cost, and return credits are not included. Margin-aware CLV: revenue minus variable costs, multiplied across the expected customer life. The common shortcut is to multiply revenue by lifespan and call the result value. That overstates the money available to fund acquisition and retention because it ignores the cost to serve. Revenue base $50 monthly revenue x 12 months = $600 lifetime revenue. This is the top-line relationship size. It is not yet value because none of the variable costs…

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