LoyalFlow

Tools

Retention sensitivity calculator

Estimate lifetime value, then see what one more percentage point of annual retention is worth after loyalty program cost.

Use the share of customers retained into the next year.

Optional. Include points, rewards, or funded member benefits.

Your retention economics

Value of +1pp retention

$16

LTV per customer at 66% retention

Lifetime value
$549
LTV net of program cost
$521
Annual contribution margin
$192
Expected customer lifetime
2.9 years

How this is calculated

The simple geometric model estimates expected lifetime as one divided by churn. Lifetime value is average order value multiplied by annual purchase frequency, gross margin, and expected lifetime.

The highlighted figure recomputes the model at retention plus one percentage point and subtracts the base LTV. Program cost reduces gross margin before lifetime value is calculated, so the net figure shows what remains after rewards rather than treating them as free.

This model assumes stable annual retention and purchase behaviour. It is a planning model, not a cohort forecast. For the failure modes behind the formula, read The Retention Math Every Founder Should Know .

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