MKT 626 · Customer value · Tool 1

When does the money arrive?

Two customers bring in the same expected contribution each month. One pays a subscription on a regular schedule. The other buys whenever they feel like it. Build up the picture one layer at a time and see what timing does to value.

One idea per viewBoth customers share the same active window, so any difference you see comes from timing, not lifetime.

Business assumptions

Monthly · workbook contribution, illustrative churn
...Expected contribution / month
...Expected active billing periods
Unlocks in step 2Expected PAV before CAC
Unlocks in step 3Expected CLV = PAV - CAC
Unlocks in step 3Never cover CAC: subscription / transactional

One active window, two timing patterns

Subscription Transactional Undiscounted outline

The chart is this table

Every mark above is one row below.

Model, timing, and source notes

Workbook inputs. Class 7 - BG and CLV.xlsx, sheet BG CLV: AOF E1, AOV E2, margin E3, monthly contribution E4 = E1 x E2 x E3, and discount rate E5. The 18% monthly churn is an illustrative homogeneous rate, not the Blue Apron fit: the fitted beta-geometric model has a mean churn propensity of 35.4% and spreads it across customers. That is why expected PAV here is smaller than the beta-geometric figure in the companion tool. Heterogeneity, not a different data source, explains the gap.

Teaching assumption. Subscription contribution arrives at the start of each active billing period. Transactional orders follow a Poisson process while the customer is active, so both lanes have the same expected raw contribution per month. Marks to the right of Today are simulated draws, not observed future cash.