I didn’t learn LTV from a SaaS textbook.
I learned it on the phone to a farmer arguing with me over £0.01 per litre.
At a UK fuel company where I worked, I had a portfolio of customers and one simple job:
sell fuel at a profit, and keep the right customers for a long time.
Margins were razor thin. On a 1,000L order, sacrificing £0.01 per litre could wipe out most of the profit on that order.
One farmer client, in particular, treated every order like a hostage negotiation. If I tried to hold the line on price, I’d lose the order. If I caved completely, I’d destroy the margin. The only way through was to think long term, in lifetime value (LTV), not single order value.
So I’d let him “win” £0.01 on the fuel, and then ask about everything else he needed to keep the farm running:
AdBlue, oils, lubricants, additives, priority delivery, smart meters.
He always needed something.
On paper, that single fuel order looked weak.
In reality, the relationship looked like this:
Slightly lower margin on the core product
Extra revenue from ancillaries with much better margins
Higher ARPU overall
Priority service and convenience for client → more loyalty, less price-shopping
The win wasn’t the order. It was the relationship over time.
In other words: LTV.
That’s the lens I use when I look at publishers talking about LTV, CAC and LTV:CAC.
Me on a fuel run in 2018, where I used go to meet customers in person.
The problem with “one LTV” for your whole audience
Abi Spooner at Atlas talks about this all the time:
lifetime value is the metric you should build your recurring revenue strategy around, because it reflects the full economic value of a subscriber relationship over time, not just a snapshot.
In most sectors, a sensible working definition is:
LTV = ARPU × average customer lifespan × gross margin.
Note: a big mistake made by many is they include only revenue instead of gross margin.
Avoid this mistake, ensure you are looking at the profitability of each customer.
Nothing exotic there.
Where it gets interesting (and messy) is what happens next. A lot of publishers calculate one LTV and one LTV:CAC and use that as a comfort blanket.
If I map my old fuel brain onto a typical media business, here’s how I picture it:
Cohort | ARPU / year | Avg tenure | Gross margin | Profit LTV | CAC | LTV:CAC |
|---|---|---|---|---|---|---|
Black Friday | £60 | 0.75 yrs | 70% | £31.50 | £18 | 1.8:1 |
Evergreen Newsletter converts | £120 | 2 yrs | 70% | £168.00 | £35 | 4.8:1 |
Corporate Accounts | £400 | 3 yrs | 75% | £900.00 | £90 | 10:1 |
Blend these and you might proudly report an LTV:CAC of ~3.5:1.
Look at them separately and you can’t really hide:
The discount cohort is basically a pet project at 1.8:1.
The evergreen cohort is good but not bulletproof at 4.8:1.
Corporate is the farm client buying everything, your 10:1 relationship.
From where I sit, that blended number is like averaging all my fuel customers together and pretending the margin is “fine”. It’s mathematically true but strategically useless.
What people miss in Abi’s message
Two bits of Abi’s thinking feel especially relevant here, and often get watered down.
1. LTV is about relationship types, not products.
Most teams still talk about “LTV of a digital sub” as if a reader only ever touches one thing. Abi’s framing is closer to how I thought about that farmer: you look at everything they buy over time (print, digital, newsletters, events, memberships, corporate bundles) and treat that as one relationship.
In fuel terms: not “margin on diesel today”, but “margin on fuel + additives + service + loyalty over the next 5 years”.
2. LTV is something you design for.
In other industries, people like Eric Andrews obsess over unit economics and CAC payback by cohort before they scale anything.
Abi’s version of that, for publishers, is: use LTV to design acquisition, onboarding, pricing and retention so that certain cohorts hit certain thresholds. The question isn’t “What is our LTV?” It’s more like:
Which cohorts do we want?
What LTV:CAC band do they need to land in?
What would we have to change in product, pricing or targeting to get them there?
That’s a very different question to “Is our average LTV:CAC above three?”
How I use LTV:CAC as a sanity check
My bias, again, shaped outside media, is to treat LTV:CAC as a governance tool, not a fun fact or boardroom buzzword.
Alex Hormozi’s rule-of-thumb is a useful rough shorthand:
3:1 as minimum viable,
5:1 as pretty good,
10:1 as excellent.
The exact numbers don’t matter as much as the hierarchy.
Translated into how I’d think about a publishing business:
Under 3:1: this is a subsidy. Someone else is paying for it; either higher-LTV cohorts or investors. If we keep it, it should be with a hard cap and a specific reason. Otherwise get rid.
Between 3:1 to 5:1: worth keeping, but needs improving. This is where pricing, onboarding, engagement and cross-sell work should be focused.
Above 5:1: this is where I’d be comfortable betting headcount and time.
Above 10:1: this is the holy grail, where you profit 10x what it costs to acquire an individual customer. An incredibly strong moat, and sets you up well for reinvesting in other areas of the business.
If I ran a newsroom or subscription business, I’d want to be able to point at at least one segment and say: “That’s our ‘farmer’ cohort. We might compromise on the headline price, but we’ve designed the relationship so that the economics stack over time.”
And I’d want at least one thing on the roadmap I didn’t launch because I couldn’t see a realistic path into the right band.
I’m sure there are other ways to run a business, but this is what has worked great for me, and how I approach running Writers’ Bloc.
A practical way to pressure-test your own numbers
If I were sitting with your team to figure this out, I’d start simple:
Pick three cohorts
One big promo (like your Black Friday), one always-on channel (e.g. newsletter → sub), one higher-value segment (B2B / group / high-ARPU).Estimate profit-based LTV for each
ARPU × average lifespan × gross margin. Imperfect is better than not doing it. You can always refine and improve later.Work out all-in CAC and rough payback
Not just media spend – include sales, discounts, creative, anything you wouldn’t spend if that cohort didn’t exist.Drop them into buckets
Under 3:1, over 3:1, 5:1–10:1, and 10:1+.Ask yourself two questions
Which cohort most resembles my “farmer”, the one I’d happily keep for years?
What am I currently funding that, if I’m honest, lives in the subsidy bucket?
The numbers won’t be perfect on the first pass. That’s fine. The point is to see your audience less as “subscribers” in general and more as distinct relationship types with very different economics.
Because in the end, the way I think about it is this:
LTV is not just some fancy buzzword, it’s your razor for decision-making.
Use it to cut the unprofitable ideas.
Your CFO will thank you for it.
Forward this to whomever on your team keeps asking for more ‘brand campaigns’, and ask them where their idea sits on the 2:1 → 10:1 LTV:CAC spectrum.
Bonus Material:
With our Around the Bloc podcast launching this Friday, you get a special sneak peak clip of from my conversation with, none other than the LTV guru, Abi Spooner.
In this clip we chat about the ‘forever promise’ from Robbie Kellman Baxter, and how publishers can apply it to their own business and customers.