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You have completed Introduction to Churn and Lifetime Value (LTV) Analysis!
You have completed Introduction to Churn and Lifetime Value (LTV) Analysis!
Preview
We highlight an important consideration when calculating LTV, Cost of Goods Sold, also known as COGS.
Example Files
- COGS spreadsheet example from this video
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The problem with this formula is
that not every dollar of revenue
0:00
has the same value to the business.
0:04
The calculation is simply reporting
a gross revenue LTV number, but
0:06
we have to take into account how much
it costs us to create that product.
0:11
In other words, we have to factor in what
an accountant typically refers to as
0:17
costs of goods sold, or COGS.
0:22
In some businesses these are called
cost of revenue, right, COGS,
0:26
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