LTV Calculator for Annual Data

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1	LTV Calculator for Annual Data
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3	http://www.forentrepreneurs.com/	by David Skok, General Partner at Matrix Partners
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5	Please refer to this blog post for details:		http://www.forentrepreneurs.com/ltv/ ‎
6	Input cells where you enter your own data are formated with this color:
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8	Formulae used:
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13							Note
14							This calculator assumes you know your Customer Churn Rate and the Growth Rate for
15	Known Customer Churn Rate and Growth rate of Remaining Customers						the remaining customers (that have not churned). However some readers my not know their
16	ARPA x Gross Margin %		$1	Annually			Growth Rate for remaining customers, and instead may only know their Customer Retention
17	Churn (Customer Churn Rate)		10%	Annually			and Dollar Retention Rates for the entire cohort, including churned customers.
18	G (Growth Rate for remaining customers)		22.22%	Annually	<-- If you don't know this, see Note to the right		If that is your situation, the calculator below will give you Churn and G (Growth Rate
19	Results in a Dollar Retention Rate of:		110.00%	Annually			for remaining customers)
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21	Discount Rate	0%	10%	15%	20%	25%	Customer Retention Rate	90%
22	K	0.90	0.81	0.765	0.72	0.675	Churn (Customer Churn Rate)	10%
23	LTV	$ 30.00	$ 10.25	$ 7.33	$ 5.61	$ 4.50	DRR (Dollar Retention Rate)	110%
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25							G (Growth Rate for remaining customers)	22.22%
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30	Copy of Data for Graphing
31		0%	10%	15%	20%	25%
32	LTV	$ 30.00	$ 10.25	$ 7.33	$ 5.61	$ 4.50
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46	LTV Calculator for Monthly Data
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48	This is pretty much the same as the above calculation, except that to convert the Annual Discount
49	Rate to a Monthly Discount Rate using this formula: Monthly rate = (1 + annual rate)(1/12) – 1
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52	ARPA x Gross Margin %		$1	Monthly
53	Churn (Customer Churn Rate)		1%	Monthly
54	G (Growth Rate for remaining customers)		2.00%	Monthly
55	Results in a Dollar Retention Rate of:		100.98%	Monthly
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57	Annual Discount Rate	0%	10%	15%	20%	25%
58	Monthly Discount Rate	0%	0.80%	1.17%	1.53%	1.88%
59	K	0.99	0.98	0.98	0.97	0.97
60	LTV	$ 298.00	$ 117.22	$ 88.25	$ 70.56	$ 58.77
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