Interview Query

Revenue Retention

Have you seen this question before?

Let’s say that you work for a software as a subscription (SAAS) company that has existed for just over a year. The chief revenue officer wants to know the average lifetime value.

We know that the product costs 100 dollars per month, averages 10% in monthly churn, and the average customer sticks around for around 3.5 months.

Calculate the formula for the average lifetime value.

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