Knowing how much your average customer is worth enables you to determine how much resource you can afford to put into attracting new members. You can use the lifetime member value to create a budget for promoting and developing your site that ensures you aren’t spending more than you are making. Keeping a database with detailed records of your members’ purchases will allow you to determine a more accurate lifetime member value over time. This can help you to adjust your prices and strategies to maximize your profit without losing your customers. You can monitor the effect that changes to your site have on your lifetime member value.
As subscription businesses, membership sites rely on recurring business. Once your membership site is fully functioning, about 75% of your sales will come from your current subscriber base, so you will want to give a great deal of thought to your rebilling strategies.
There are two main models to consider when determining your rebilling strategy:
1. Optional renewal
If you use optional renewal, your members will be notified that their membership is due to expire, and will be given the option to renew it. If you use this method, you will want to make it as easy as possible for your members to renew, and send them at least two reminders.
2. Automatic renewal
Automatic renewal is also known as continuous service. If you choose to use this method, your members will receive a notification that a subscription payment has been debited from their account. This has the obvious advantage over optional renewal in that your members do not have to make any effort to renew their membership. On the contrary, they have to make an effort not to renew it.
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automatic renewal lifetime, what is member valueFiled under: Business,Reference
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