Customer life time value

...or why nobody is paying for an address list

Time and time again entrepreneurs selling their businesses wonder why their customer base is not figured in the valuation equation. It is all about customer attrition rate (or the 1-Retention rate, if you will). Most of the cases there are no statistics available to proof, what the balance is of acquisition cost and the life time value of a customer is. So back to the good old industry multiples or a DCF that will be challenged by the acquirer on all these assumptions. Please read an article by Venture capitalist David Skok, explaining the relationships.

for entrepreneurs