How to Calculate Your Studio’s LTV in 5 Minutes

What if one clean calculation could tell you exactly where to spend, what to price, and how to grow without burning cash? We walk through a fast, no-fluff method to calculate lifetime value (LTV) that replaces guesswork with clarity—and turns scattered marketing into a reliable growth system.

We start by nailing your real monthly revenue per member across all packages, not just the headline price. Then we layer in average membership lifespan, showing why channel and offer matter: a Facebook challenge member who stays two months isn’t worth the same as an intent-driven Google member who sticks for ten. Multiply to get gross LTV, and you’ll see immediately which campaigns deserve budget and which ones quietly drain profit.

From there, we tighten the model with profit-adjusted LTV by subtracting the actual costs to serve—coaching labor, processing, and other variable expenses—so you can set smart CAC targets and know your break-even window with confidence. We share a client example where LTV rose from $500 to $1,500 once the numbers were measured correctly, unlocking bolder, smarter acquisition and more sustainable scale. And we highlight why retention is the real multiplier: one extra month can add meaningful profit without a single extra ad dollar. Expect practical guidance on segmenting LTV by channel, deciding when to reallocate spend, and building simple retention systems that keep members engaged longer.

Ready to make your marketing dollars work harder? Listen now, download our free LTV/CAC calculator from the description, and tell us which channel brings your stickiest members. If this helped, subscribe, leave a review, and share it with a studio owner who could use clearer numbers and calmer growth.

Chapters

• 0:00 Why LTV Matters
• 0:56 A Client’s LTV Jump: 500 to 1,500
• 1:30 What We’ll Cover Today
• 1:53 Step 1: Monthly Revenue Per Member
• 3:02 Step 2: Average Membership Lifespan
• 4:34 Step 3: LTV Math And Channel Impact
• 6:31 Step 4: Profit-Adjusted LTV
• 7:26 Retention’s Profit Power
• 8:41 Tools, Partnerships, And Next Steps
• 9:44 Wrap-Up And Download Reminder

Transcript

SPEAKER_00: 0:00

Most studios start to skip this sort of calculation, leaving them blind to whether they're truly becoming profitable or vice versa. Hey everyone, welcome to another episode of the Fitch Gritcast. I'm your host, Zach Coleman. And today we're gonna help you calculate your LTV or lifetime value of your members in let's try five minutes and go. If you've ever had a problem with your LTV or, like I said, lifetime value, you can't really make those smart decisions on if you're pricing enough, if you're utilizing the right channels, or how effective your marketing or retention can be. Most studios start to skip this sort of calculation, leaving them blind to whether they're truly becoming profitable or vice versa. They think that they're utilizing certain channels effectively, but in reality, they're not truly becoming profitable because they're losing out on retention and/or that lifetime value. You know, I worked with a studio a little while back. When they first came in, we kind of assumed that their LTV was around, you know,$500. But after going through the numbers, really diving in and understanding the lifetime value of said member, we were able to figure out that it was around$1,500. That meant we were able to build more marketing stratas more confidently and help his acquisition scale faster based off channel, based off spend, et cetera, et cetera, et cetera. Instead of him just paralyzing either overspending or underspending within different forms of marketing. So today we're gonna cover these four things. We're gonna go really fast through these. If you'd like, you can go down into the description and you can download our LTV slash CAC calculator. And then on our next video, we will go through the ratio between customer acquisition costs and your LTV. So for this one, we're just gonna kind of give you an understanding of that LTV. So we're gonna go fast. Step number one, monthly revenue per member. Number two, average membership lifespan. Number three, we're gonna kind of utilize that to come up with a rough lifetime value. And then fourth, for a little bit more advanced, um, once you're a little bit bigger, kind of understanding the gross of that lifetime value and then minusing it down to what the actual lifetime value is based off of profitability. So let's kind of dive into them. You know, step number one, really understanding your monthly revenue per member. As I said earlier, we assumed this client assumed that his membership cost was about$500. Why? Because you kind of he kind of looked at the value of his members based off of a month value, right? You spend$150 on marketing or you spend$500, you get a client for let's say a membership of$150. But so to really come up with your overall monthly revenue per member, you need to kind of dive in and look at all your packages. How many different types of packages are you doing? Are you doing semi-private? Are you doing group classes? Are you doing one-off classes, et cetera, et cetera? And you want to average out all of your members to kind of come up with a rough idea of what is your average membership cost. This is gonna actually help you really dive in and go into further things down the road, like which services should we cut, which one should we keep, which one should we raise in price? But coming up with this average is going to help you determine not just your lifetime value, but how to leverage it in different aspects. So we're gonna kind of give an example here and we're gonna say that lifetime value of a client for let's say a boutique studio is around$150. So we're gonna stick with that$150. That is their average cost per membership per month overall between all their packages. So we say$150. Then we're gonna kind of look into step two here, which is understanding the average membership lifespan. How long do these members really stay? Now, if you're averaging out based off this overall average, you can also separate these out and channels, different types of marketing campaigns, different types of packages and price points as well. And you can kind of calculate them next to each other because sometimes your lifetime value is going to shift. So just for the the case of keeping this simple and getting you a start on how to handle this, um, I would say let's say an average lifespan of a client is around 10 months. So step number three here is then times that basically together. Very simple. You know, 10 months times 150 is$1,500. And that is the lifetime value in the cost that is associated anytime you lose or you gain a client. So you can kind of look at this calculation in many different ways. You can kind of take the lifetime value of a member and you can utilize it to understand, okay, now if we're focusing on Facebook, for instance, versus uh, let's say Google versus direct mail, and those are your three marketing directions, you can actually sit down and and divide the cost out and understand how long that channel of members is staying with you. The way people come in definitely makes their decision process if they're staying a month, two months. For instance, Facebook ads and challenges, they're doing free stuff, probably one or two months. So if looking at this as an example on step three, if you had a Facebook, uh, let's say a Facebook, you had let's just say 150 leads come in, you sold two leads, you spent$3,000. And we'll get into the ratio in the next video, but you know,$3,000 you sold two, you know, that would be$300, that would be$150 per, but they're then they're not, they're only staying two months. That's$300. That means you really made$600 overall off of one month set of budget, which means you're not going to make any money. Now, vice versa, if you're looking at like, let's say Google and you're actually spending more money on advertisement, let's say you're spending that same three thousand dollars and you're seeing just less leads come in, let's say 20 leads, but you're actually selling, you know, let's say five of those people. Let's just do five times 10. So that's$5,000 per member. And then you know that you times that by five, but$25,000. So you know that if you're going to spend$3,000 a month, that you're going to eventually make$25,000 off of those members. Remember, ads spend and what you're spending a month is just for one month. Then they become members. So you're actually accumulating. So that's just a very simple way. Um, and I just tried to do a really fast example there of how you can come up with your lifetime value of a member and how it can actually be affected by different channels. Now, lastly, and for the more experienced, let's talk about factoring that profit margin. If you've sat down and understood uh your overall, you know, gross LTB, which, you know, like we said, would be$1,500 in this in this scenario. Um, and then you take that and you take out any of your additional expenses, employees, for instance, not necessarily kind of somewhat take out your marketing too. You kind of take those out and you come up with uh your profit margin. What is your profit margin overall, which is we'll just say 50% in this case to be scenario. So then you would take that$1,500 and you get down to about$750. That$750 would then be considered your lifetime value because now you're cutting out the marketing side of things and the employees and the other expenses to know that, hey, this is my lifetime value, this is the money that we're gonna profit on said member. You know, the HFA did come about and they did they did do a study that showcased that when you increase membership retention by just five percent, it can boost profitability from upwards of 25 to 95%, which drastically increases the lifetime value of each member. Now, why is this stat important? Because as you're looking at LTV and you're working with marketing agencies or you're bringing someone in-house to do your marketing, whatever you may be doing from the marketing side, you have to notice that if you're able to just grow person's lifetime value by one month, that adds on$150, right? So you're looking at instead of$1,500, you're looking at$16.5, for instance, or you're looking at 50% of$1,65. I'm not going to get into the math, but you're looking at an extra, we'll just say$100 for that one member. Now think about if you did that with 50 members, 50 members times 100, you know, that's another$5,000 a year. So uh you can see how not necessarily uh thinking that your marketing is broken, but your your retention and how you can do so other stuff internally to try to increase your lifetime value of said member. A lot of that stuff does start out out front. And if you'd like to know more, we do partnership with Loyal Snap. If you want to come in and have a conversation about how you can have a member retention email system kind of set up, not just for you in one location, but multiple locations. It emphasizes your brand messaging and really aligns with helping to build that retention. We offer that at a discounted rate for all of our clients. So just you know, set up a call with me and we can talk about it further. But besides that, go down in the comment section, description, leave a comment. Have you figured out your LTV, which platform tends to be the best for you? And click that download in the description section. It will kind of give you an idea of your client acquisition cost ratio versus your LTV. And it gives you some examples of different scenarios where you can dive into channels, different marketing campaigns, et cetera, et cetera, and shows you maybe some of those things that you might not realize within your marketing expenses that may actually be uh affecting why you're not closing compared to other metrics. Again, that's down in the description. Go ahead and download that. Once you start to understand your lifetime value, you can actually start to build more confidently, understand how much you're actually needing to spend to grab a new member, focusing on more retention and helping you start to scale more sustainably. Again, I really appreciate you jumping on the Fitch a great cast. I'm your host, Zach Coleman, and we'll see you in the next one.