Lies of Customer Lifetime Value

The article challenges how SaaS companies calculate customer lifetime value (LTV) and churn rates, arguing that historical churn metrics are misleading predictors of future customer retention due to rapid technological change, increased competition, and AI-driven cost compression. The author emphasizes that companies must properly analyze churn cohorts, distinguish between regrettable and non-regrettable churn, and recognize that churn is non-linear—particularly as products mature and new competitors emerge.