Calculating subscription website revenues

What is the lifetime customer value (LCV) of each subscriber who signs up for your subscription or membership site?

The LCV can be calculated using the formula below where RR = renewal rate and P = annual membership fee.

LCV = 1/(1-RR) X P

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1/(1-0.8) X $600 = $3,000.

Meaning each new subscriber at $600 a year will stay with you on average 5 years and spend $3,000 total.