We’re in the end game now

DEEP DIVE

You’ve probably heard the famous Dan Kennedy quote:

“Whoever can spend the most to acquire a customer wins”

This also applies to audience acquisition and email subscriber acquisition.

If you make more money per customer, client, subscriber, or follower than your competition — you can spend more to acquire them and crush your competitors.

This is the end game.

The game of maximizing LTV (audience and customer lifetime value) so your business wins in the long run.

The reason this matters more than ever is simple…

We are beyond “easy” in every acquisition channel.

The inbox is crowded, Meta ads are expensive, Google search is being dismantled, Facebook, Twitter, and other social channels have cut reach and penalized link sharing.

There are (almost) no growth hacks anymore.

The only way to win the end game is to make more money per audience member and customer than everyone else so you can spend more to acquire them.

Here’s how…

First, a clarification: By “spend more to acquire them” I’m not saying that everyone needs to use paid acquisition to grow.

“Spending more” could mean:

• Producing more content on more channels

• Increasing the quality and production value of your content

• Hiring a bigger content and marketing team to gain more audience, leads, and customers, faster

Paid acquisition could be helpful strategy to grow your business. Or not.

Every situation is unique. There are many ways to grow.

Now, here’s how to maximize LTV…

7 ways to maximize LTV and win the end game

We'll start with a boring, yet critical need. Keep reading, it gets better…

1) Know your numbers

You should know and track your subscriber LTV, customer LTV, and unit economics.

Unit economics = The revenue and costs of one unit of your business — like one customer or one newsletter subscriber.

• Here’s a simple model for calculating your newsletter subscriber economics, LTV, and ROAS.

• Measuring newsletter subscriber LTV is tricky. This model is not perfect but you can edit it to fit your needs.

Measuring customer LTV is simpler. With customer LTV you don’t need to factor in sponsorship CPMs, email open rates, and newsletter subscriber churn.

Basic LTV Formula for Paid Subscription Products/Services

LTV = Average Revenue Per User (ARPU) × Average Customer Lifespan

Where:

• ARPU = Monthly recurring revenue ÷ number of active paying subscribers

• Average lifespan = 1 ÷ monthly churn rate (as a decimal)

Step 1: Calculate Monthly Churn Rate

Number of monthly cancellations ÷ Number of Total Subscribers = Monthly Churn %

Track how many paying subscribers cancel each month as a percentage of your total subscriber base. If you have 1,000 subscribers and 50 cancel monthly, your churn rate is 5%.

Step 2: Determine Average Lifespan

If your monthly churn is 5% (0.05), your average customer lifespan is 1 ÷ 0.05 = 20 months.

Step 3: Calculate ARPU

Total monthly subscription revenue ÷ total active subscribers. If you generate $10,000 monthly from 1,000 subscribers, ARPU is $10.

Step 4: Final LTV Calculation

$10 ARPU × 20 months = $200 LTV

Basic LTV Formula for One-Off Product/Services

Revenue from product sales ÷ total customers

For example: You’ve generated $1,000,000 in revenue from selling your products to 1,003 customers. Then, your customer LTV = $997

2) Understand your situation

If your business does less than $500k-$2M in annual revenue, you may not have an LTV problem.

Yes, this entire post is about maximizing LTV. It’s important.

But it may not be your constraint yet.

If you run your numbers and…

• Your LTV:CAC ratio for newsletter subscribers is 3:1 or more

• Or, your LTV:CAC ratio for customers or clients is 5-10:1 or more

(Example: Your newsletter subscriber LTV is $12 and you acquire subscribers for $3, you have a 4:1 LTV:CAC ratio).

You don’t have an LTV problem.

You have a subscriber and customer acquisition problem.

Disregard this post and figure out how to grow your audience, generate more leads, and acquiring customers faster.

You have a funnel that works. All your focus should be on getting more people into it.

However, if you don’t meet the LTV:CAC ratio criteria above, keep reading.

3) Allocate time and resources

Most founders spend the vast majority of their time, money, and team resources on activities to drive more leads and subscribers — and decrease CAC or CPA.

Activities like…

• Publishing content to new channels.

• Hiring an agency or employee to improve paid ads.

• Testing new acquisition strategies like referral programs, cross promotions, giveaways, etc.

None of that matters if LTV is the constraint that’s stopping your business from growing.

Great founders and CEOs build great businesses by allocating more resources to solving the constraint (over and over).

Instead of obsessing over CAC and CPA, you should…

Spend more time, money, and resources increasing the lifetime value of your audience, subscribers, and customers.

4) Content Market Fit

With content market fit, it’s easier to:

• Maximize LTV

• Grow your audience

• Sell sponsorships and products

• Position yourself as #1 in your niche

Without it, it's impossible to win.

You must dominate the attention of your niche or industry by publishing indispensable content that your audience has a habit of consuming.

How do you identify content market fit?

You’ll know it when you have it because people will tell you how amazing your content is.

Then, aim for these metrics:

• 50%+ unique open rate

• 5%+ unique CTR (click to open rate)

• 1+ total opens ÷ unique opens ratio (this shows when your newsletter is shared and revisited by subscribers)

If you’re not there yet, here’s how to find it.

5) Sponsor Content Fit

If you're building a business around advertising and sponsorships, you must drive results to sell and retain clients.

Aim for these targets:

• B2C unique ad CTR: 1%+

• B2B unique ad CTR: 0.75%+

• Sponsorship renewal rate: 50%+

• Percentage of sponsorship revenue from long-term partnerships (3-12 month commitments): 50%+

If you can’t do this, find sponsors that are a better fit for your audience and follow this advice to increase CTR.

Once you’ve mastered the basics, transform ads into partnerships.

Learn how to become a partner that helps brands reach their goals, not another publisher selling ad spots and traffic.

6) Product Market Fit

You'll never unlock your audience's true revenue potential without a product to sell them directly.

Your media business should have the ability to:

• Monetize 100% of your audience with sponsorships.

• Monetize 1%-10% of your audience to a higher degree by selling a product.

There are exceptions. But if you’re bootstrapping a media business and started in the past 5 years, I believe you must have both.

Having one without the other is a risk. Even with direct sponsorships, you have little control over ad budgets and ad performance after the initial click.

Aim to:

• Convert 1-2% of your email audience to a $1k to $10k product

• Or convert 3-5% to a $100-$500 product

Recommended reading: How to create and sell your first information product.

7) Ascension

Assuming you have both:

• Content market fit

• Sponsor Content Fit and/or Product Market Fit

The next step is to create a value ladder for your clients and customers to ascend.

A value ladder is a pathway to maximizing lifetime value. As your clients spend more and commit to working with you longer, they get more value.

This can be done for both sponsorships and product sales:

You can ascend advertisers from a:

• ~$5k test package

• Upsell to a ~$25k quarterly package

• Then upsell to a ~$100k annual package

I break this down here.

You can ascend customers:

• $99 per year front-end subscription

• Upsell to a $1999 per year back-end subscription

I explain this here.

There are endless possibilities for ascension.

• If you have a $1000-$2000 course, you could upsell customers to a $10,000 to $20,000 coaching program or mastermind.

• If you have a $10,000 coaching program you can upsell clients to a $50,000+ done-for-you service.

The list goes on.

My recommendation is to keep it simple: Your value ladder should have 2-3 steps, no more. You don’t need a dozen ways to upsell and cross-sell customers.

That complicates things and diminishes customer experience.

Give customers 1-2 “next steps” that allow them to pay more and get more value.

The bottom line

Follow these 7 steps in order and you’ll skyrocket LTV.

Just remember the keyword here is “in order”. If you skip to step 7 without figuring out 1-6 first, you’re shooting yourself in the foot.

Don’t get ahead of yourself. In the long run you’ll move faster and make money this way.

Final notes:

• Step 5 (Sponsor Content Fit) and Step 6 (Product Market Fit) are interchangeable.

• Depending on your situation it might be better to go all in on sponsorships/partnerships or all in on your own products.

• Some people should have both, but it depends what stage of the business you're in. You’ll need to make that call yourself.