Life Time Value Report in Google Analytics

The Life Time Value Report in Google analytics will show you the total value you have earned for a group of users over a certain period of time (currently a maximum of 90 days).

Using the Life Time Value report for B2C

Depending upon what business you are, you have different types of value you want to look at. For the retail or loyalty business, this report makes a lot of sense.

Let’s say you are buying advertising for 10 bucks per customer. Then the life time value of that customer needs to be larger than what you acquire the customer for. Right?

In fact, looking at all of the costs, I usually recommend that your acquisition cost is no more than 20% of your lifetime value for any customer.

The Google Analytics Life Time Value report will give you a simple way of tracking both the source of traffic AND its lifetime value. They even give you the opportunity to split it based on what campaign you acquired the traffic from, giving you a perfect opportunity to calculate ROAS or ROI over time in a custom metric. We’ll get back on how to do that in a later blog post.

Using the Life Time Value Report for B2B

For the business to business clients that have very little need to measure revenue per user over time as most of their acquisition happens once and is then treated as a subscription or a customer relation that happens offline, the usage of this report is a bit different.

What you should rather be focusing on is “Sessions per user LTV” that has a look at how many times a user returns to your website over the 90 day period.

If you know anything about how budgeting works in large corporations you know that most managers get a budget cut requirement every year and then get a big boost every third to fifth year in their budget. This means that they buy new tools, start new collaborations and invest in their business every third to fifth year and try to cut costs all other years.

This is especially true if what you sell is really expensive and the client is really big. Otherwise it might vary from two to three year cycles.

Either way, you need to stay top of mind for the client. They have to remember you and understand why they need you. You need to help them with something they cannot get from anywhere else and you need to find a content format that they are willing to return to in order for them to feel happy and remember you when budgeting comes around.

OH… and if you are one of those said clients reading this… well, then I suppose you can agree that you’d rather keep a service around that delivers value continuously rather than one you forgot about? Right?

If you want to read more you can find information on Google’s definition page about Life Time Value here.

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