Calculating Membership Lifetime Value


It is nice to see that some things do not change – like math. I came across an article I had read many years ago that was originally written back in 1991 outlining how to calculate the lifetime value of a member.

Understanding lifetime value (LTV) is a fundamental calculation that every membership organization should do. It let’s you know how much you can spend to acquire and keep your members. It is the foundation for a membership marketing strategy.

There are some shortcuts that I use these days to get to the numbers a little more quickly, but the article is worth reviewing.

The article was written by Harmon O. Pritchard, Jr., who at the time was senior vice president of membership for the Aircraft Owners and Pilots Association (AOPA). Harmon along with Scott McBride, the founder of Marketing General, Inc. were really the first to apply the LTV concept to membership marketing world.

Here is the link:

http://tinyurl.com/ltvarticle

Let me know what you think.

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