The simple LTV maths every studio owner should know

Lifetime value (LTV) sounds like something for venture-backed software companies, but a simple lifetime revenue estimate for a membership business fits on a napkin: monthly membership revenue times the average number of months a member stays. To move from revenue to true LTV, also account for gross margin and your ongoing cost to serve, and treat acquisition cost separately — otherwise it's easy to overvalue a member and misprice.

A member paying $120 a month who stays 10 months is $1,200 of lifetime revenue. The same member staying 20 months is $2,400. Nothing about your classes changed — only the length of the relationship did.

Most studios instinctively work the price lever (raise rates) or the volume lever (more leads). Both work, and both have costs — churned members from a price rise, acquisition spend for new leads.

The tenure lever is different: each extra month can add high-margin revenue because acquisition and onboarding costs have already been paid — though delivery and support costs remain. The member is already acquired, already onboarded, already part of the community. That's why retention work — unglamorous as it is — routinely beats acquisition work on return.

If average tenure is the multiplier, the useful exercise is a churn autopsy. Go through your last few months of cancellations and sort them into two piles:

The second pile is where LTV hides. A member who cancels over a two-month trip and never returns took years of potential tenure with them. The same member on a two-month freeze comes back on a scheduled date with their momentum — and their billing — intact.

You can't stop people's lives from interrupting their memberships. You can decide whether an interruption ends the relationship or just pauses it. Across a whole member base, that single policy choice compounds into real revenue.