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Hello friends, Welcome to everyone that signed up during the past week! Today's post continues our ongoing series on customer lifetime value ("CLV"). Here are the previous three posts:The Most Important Metric for Any Business — the nuts and bolts of CLV, how to calculate it, and how to avoid fooling yourselfMaximizing CLV: Understanding the Key Drivers and Their Relationship — how to improve CLV and drive growth by inching all the drivers in the right directionUnlock the Power of Subscr...

Welcome to all the folks who signed up this past week! Thank you to everyone who shared Growth Croissant last week, especially Brian Morrissey for mentioning us in The Rebooting (a must-read newsletter for anyone in media) and Bill Bishop (author of the original Substack Sinocism) for sharing our first post to Twitter. And a special thank you to those that became paying subscribers — I'm deeply grateful for your support, especially this early on. As a reminder, I don't plan to publi...

Hello friends, Welcome back to our ongoing series on customer lifetime value ("CLV"). Here is part 1, part 2, and part 3 — certainly not prerequisites, but they may help illuminate the post below (and future posts). We're picking up where we left off in our previous post by exploring the topics below:Subscriber decay curve — the best way to measure and visualize how well you're retaining your paid subscribers; it's also the most influential driver in our CLV model.Customer life...

Hello friends, Welcome to a fresh edition of Growth Croissant. So far, our CLV discussions have focused on paid subscriptions. Many consumer products also monetize via advertising, either as a primary source of revenue or complementary to subscription revenue. Let’s explore the different types of ads, the pros and cons of different approaches, and some important considerations when mixing ads and subscription revenue. By sharing some of the stuff we’ve learned, I hope you develop a framework ...

Hello friends, Welcome to part 2 of our miniseries on using our customer lifetime value (“CLV”) model to invest in paid ads. In part 1, we partnered with Tony Mecia, the founder of The Charlotte Ledger (“TCL”), to create a CLV model and use it to set a goal for how much we can invest to add new subscribers (i.e., customer acquisition cost, or “CAC”). Tony has graciously agreed to partner with us for part 2, where we’ll cover how to measure the performance of our ads and explore a few ways to ...

Hello friends, We’ve had a few folks ask whether their CLV model should be two years, three years, five years, or even something else. Determining the maximum time horizon for your CLV model is a tricky decision that significantly impacts the output. More important, while exploring how to set a maximum time horizon for your CLV model, we can dive deeper into measuring retention, which is the first step to understanding how to improve retention. If you’ve just joined us, you can check out this...

Hello friends, Today we’re putting our customer lifetime value (“CLV”) model into action and exploring a framework for how to invest in paid ads to drive growth. Before diving in, it’s important to note that paid ads are often not the best way to drive growth early on. Like many other types of investments, investing in paid ads and marketing typically work best to accelerate growth. If it feels like you’re pushing a boulder up the hill, it’s probably best to avoid paid ads. But if it feels li...

Hello friends, In our last post, we explored the pros and cons of different types of ads and how to think about mixing ads and subscriptions. We had a few folks respond with questions about how to model customer lifetime value ("CLV") for ads-based businesses. Like our CLV model for paid subscriptions, we can use an ads-based CLV model to make strategic decisions:How much to invest in bringing on new subscribers to an ad-supported tier?How to allocate value between the free and paid tiers?How...

Thank you for signing up and joining this adventure. Over the last decade, I've been fortunate to be a part of outstanding teams that helped launch and grow Hulu, Crunchyroll, HBO Max, and now Substack. All these services have amassed millions of paid subscribers, but we've made plenty of mistakes along the way and learned a lot about growing consumer subscription businesses. When talking with other entrepreneurs, operators, and investors, we found ourselves covering the same learni...

Hey team, We’ve reached our third post in a series covering the most important metric for any business: customer lifetime value. Our first post defined customer lifetime value ("CLV"), and our second post walked us through the key drivers of CLV — if you missed either of those posts, it might help to check them out before jumping into the one below. Now that we have a solid conceptual foundation, let's dive into a CLV model. To guide us, we'll build a CLV model for a hypothetical ne...