The traditional 'value ladder' model incorrectly assumes customers purchase offers sequentially. A 'value grid' is a superior model because it accounts for non-linear buying behavior, where customers skip steps or purchase based on specific needs. This provides a more accurate and actionable tool for calculating and increasing lifetime value.

The company initially used a one-time payment plan, resulting in low customer lifetime value. Switching to a recurring subscription model, even for a product with natural churn, massively increased revenue and LTV by capturing more value over time from each customer.

When both CAC and LTV increase, it signals rising market costs. This should trigger brands to shift focus from short-term acquisition metrics to long-term customer relationships and lifetime value optimization, as obsessing over the entire customer journey becomes key to success.

Shipt identified markups, fees, and tips as a key driver of churn. Since tips and some fees were unavoidable, they strategically focused on eliminating markups—the one component of the cost structure they could directly control—to create a powerful competitive advantage.

Rather than a universal price adjustment that would upend its business model, Shipt tested its "no markups" initiative within its Target Circle 360 membership. This limited financial exposure, targeted high-value customers, and created a powerful incentive for membership renewal and engagement.

Your ability to acquire more customers isn't just about lowering acquisition costs. It's fundamentally limited by how much gross profit each customer generates. Increasing a customer's worth directly enables you to spend more to acquire new ones, creating a powerful growth loop.

Shift from a transactional view of partners to a long-term investment mindset. This "Partner Lifetime Value" approach, which treats partnerships like long-term assets, acts as a force multiplier for growth, leading to higher profitability and success.

CLTV isn't just a metric; it's a strategic map. Understanding purchase frequencies and the entire customer lifecycle should be the foundation for creative choices, promotional timing, and messaging. Many brands neglect this, but it's the key to balancing acquisition with profitable retention.

C-suites and shareholders are increasingly focused on the long-term profitability of customer relationships. ABM programs should be measured by their ability to increase customer LTV, which reflects success in retention, cross-selling, and building "customers for life," not just closing the next deal.