How long do they stay?

A subscription business is a leaky bucket: every period some customers drain away. The leak rate alone tells you how long the average customer stays — and with what they pay you, what each one is worth and whether that covers the cost of pouring them in.

The line
% churnThe share of customers who cancel each period. 3% monthly churn means 3 of every 100 customers leave this month — and, compounded, a customer base that turns over completely in a few years. each, paying€ARPUAverage revenue per user — what one customer pays you in a single period, before costs. per month.
Keep% gross marginThe fraction of revenue left after the direct cost of serving the customer (hosting, support, payment fees). LTV is built on gross profit, not top-line revenue., and spend€CACCustomer acquisition cost — the all-in sales and marketing spend to win one new customer. Set it to zero to ignore acquisition and just value the customer. to win one.
€40 gross profit per month · 97% retained each month
What a customer is worth
33.3 monthsAverage lifetimeHow long the average customer stays, if churn holds steady: 1 ÷ churn rate. At 3% monthly churn that's about 33 months.
€1 333LTVLifetime value — the total gross profit one customer brings over their whole stay: ARPU × margin ÷ churn.
2.7×LTV : CACLTV ÷ CAC — how many times over a customer repays what you spent to acquire them. 3× or better is the common health bar; below 1× you lose money on every sale.
12.5 monthsPaybackHow long a customer's gross profit takes to repay their acquisition cost: CAC ÷ (ARPU × margin). Until then the customer is underwater — and any who churn before it never pay back at all.
ThinAt 2.7× LTV:CAC you're ahead, but below the 3× rule of thumb — little slack for the rest of the business. You recoup acquisition in 12.5 months.
The bucket draining
AfterStill subscribedValue banked
1 month97%
€40
3% of LTV · underwater
3 months91.3%
€116
8.7% of LTV · underwater
6 months83.3%
€223
16.7% of LTV · underwater
12 months69.4%
€408
30.6% of LTV · underwater
24 months48.1%
€691
51.9% of LTV · paid back
36 months33.4%
€888
66.6% of LTV · paid back

The marker on each bar is your €500 CAC — a cohort is underwater until its banked value reaches it, then in profit beyond. Cumulative value rises fast then flattens onto the LTV ceiling — the long tail of loyal customers is worth less than it looks, and shaving the churn rate lifts the whole curve far more than squeezing another period out of the stayers.

undiscounted LTV = ARPU × margin ÷ churn · pairs with customer lifetime value