Fractional Banking and the Role of LTV in DTC Business Growth

Increasing the lifetime value (LTV) of customers is also a vital aspect of scaling any DTC brand. LTV is a measure of the total revenue that a customer will generate for a business over the course of their lifetime. By increasing the LTV of customers, a brand can acquire future cash flow at a profit.

One of the key ways to increase LTV is to improve the second purchase rate (SPR). This refers to how often a customer who has made one purchase is likely to make a second purchase. By improving the second purchase rate, a brand can acquire future cash flow at a profit because the customer is more likely to return and make additional purchases.

Another way to increase LTV is to improve the average order value (AOV) of each purchase. AOV is the average amount that a customer spends per purchase. By increasing the AOV, a brand can generate more revenue from each customer purchase, which increases the overall LTV of the customer.

Overall, the path of prioritizing LTV is finding the simplest way to ensure that somebody that pays you today is also going to pay you tomorrow, next week, next month and next year, and so on. With a higher LTV, you can invest more money in acquiring more customers and growing your business. This allows a brand to effectively tap into fractional banking to grow far more aggressively than focusing on day 1 profits ever could.

View Reddit by CTtheDisrupterView Source

Best website to start freelancing?

Less crowded & full of opportunities

Leave a Comment

Your email address will not be published. Required fields are marked *