N+1

We‘ve written previously about the trap of LTV, saying instead it’s better to focus on landing the next purchase.

We wrote it as N+1 > LTV, where N was the last purchase.

The idea, roughly, was that compressing LTV might ultimately sell the brand short in the long run.

Sound crazy?

It’s not. LTV is a compound metric, meaning you’ve got underlying components to address and improve in order to move the needle on the KPI everyone tells you to focus on.

What good is focusing on something if you can’t impact it?

The components, though, are things you can focus on: repurchase rates, purchase frequency, average order value.

You move one of those levers, and you improve LTV.

So, maybe we should stop obsessing over a metric we can’t control.