How To Calculate Newsletter Subscriber LTV (With Examples)

You’re at war.

Your newsletter subscribers are your army.

Each subscriber you have represents a single soldier in your army.

And, every soldier goes to battle for you to generate revenue for your newsletter.

However, not every soldier will live through every battle. As commander of your army, how do you calculate the total monetary value each soldier provides while under your command?

The key is to understand the lifetime value—otherwise known as LTV. This metric helps you determine the value of your email list by breaking down how much money a subscriber is worth to you.

Now, this may sound a bit blunt. Your subscribers aren’t just a number–They’re real people. And life and death aren’t on the line here. But if you want to turn your newsletter passion project into a real income-earning business, you need to start looking harder at your numbers.

LTV is one of the most important newsletter metrics to track. Understanding how to calculate the LTV of your subscribers is crucial to running a successful newsletter. This number essentially tells you how much revenue a single subscriber is likely to generate for you for the entirety of their time subscribed to your newsletter.

In this quick guide, we’ll break down what LTV is, why it’s important, and exactly how to calculate it so you can run a successful army…er… newsletter.

What Is LTV?

LTV, or lifetime value, is a key metric newsletter publishers can use to measure the total revenue gained over the course of time from a single subscriber.

Often used in businesses to determine customer lifetime value, this metric is essential for newsletter creators to make informed decisions–especially when it comes to the business side of their newsletter.

LTV is impacted primarily by two numbers: how long someone subscribes and the total revenue earned. So, it’s in a newsletter publisher's best interest to retain subscribers as long as possible since there is a direct correlation with increased revenue over time.

The higher your LTV is, the better you can optimize your return on investment (ROI). For instance, if you know your subscriber LTV is $20, but you’re only investing $2 into acquiring new subscribers, you could likely double your acquisition costs and still maintain a great ROI.

When you understand your LTV, you can determine exactly how much time and money you should invest in your newsletter to acquire new subscribers, grow your business, and remain profitable.

How Do You Calculate the LTV of a Subscriber?

In order to calculate your newsletter subscriber LTV, we need to break our equation down into two parts:

1. The average revenue per newsletter subscriber

2. The average lifespan of a subscriber

Calculating the Average Revenue Per Subscriber

First, look at your revenue per subscriber, or “RPS.” In order to make this calculation work, you have to pick a set time frame to analyze your data. An easy starting point is the past six or twelve months. Next, calculate the total revenue generated by your newsletter in this time period. We’ll call this “R.”

Next, Look at the number of newsletter subscribers you have had in your chosen time period “S,” and the number of months in your chosen time period “M.”

Now, multiply the number of subscribers you had in your chosen time period by the number of months in that time.

Finally, divide the total revenue generated by your newsletter by the number of subscribers you have had in your chosen time period multiplied by the number of months in your chosen time frame.

The calculation looks like this:

RPS = R / (SM)

Still following?

Here’s an example to wrap your head around the math:

Bobby has a newsletter about baguettes. Why does he have a newsletter about this particular French pastry? We don’t know. But he does. Anyways, Bobby has 1,000 subscribers on his newsletter list. Over the past 12 months, Bobby has generated $10,000 from his newsletter. Not a bad side income, Bobby! Now, let’s find out Bobby’s revenue per subscriber.

In Bobby’s case, the calculation is broken down like this: Revenue Per Subscriber (RPS) = Revenue over Y Months / # Of Subscribers x Y Months

RPS = R / (SM)

RPS = R ($10,000) / (1,000 x 12 months) = $0.83.

So, looking at Bobby’s revenue per subscriber on a 12-month lookback, he’s making 83 cents per subscriber.

If you’re still scratching your head, here’s another example:

Jilly has a newsletter all about Jackie Chan. Again, we’re not sure exactly why… But, she’s got 5,000 subscribers who are clearly avid fans of Jackie Chan and his movies.

In the past 6 months, Jilly has made $8,000 from her newsletter. She has had 5,000 subscribers in the past 6 months.

RPS = R / (SM)

RPS = R ($8,000) / (5,000 x 6 months) = $0.266

After doing the calculation for Jilly based on a 6-month lookback, we can see she’s making 26.6 cents per subscriber.

Calculating the Average Lifespan of a Newsletter Subscriber

Now that we’ve covered how to calculate revenue per newsletter subscriber in a set time period, it’s time to do the second half of the calculation: the average lifespan of your newsletter subscriber.

This calculation is simply the average amount of time that someone remains on your list before they unsubscribe from your newsletter.

Calculating the average newsletter subscriber lifespan can be done by tracking the subscription rates and unsubscription rates of your email list over time.

Tip: If you want to be even more accurate with this calculation, you may want to also include subscribers who have become inactive.

One way to calculate this is by starting with a set time period. For instance, here are Jilly’s last six months of new subscribers and lost subscribers:

To calculate newsletter subscriber lifespan “SL,” we’ll take total subscribers “T” divided by subscribers gained “G” minus subscribers lost “L” per month.

SL = T / (G-L)

Let’s take a look at Jilly and her Jackie Chan newsletter again.

Jilly has 5,000 subscribers. She gains 191 new subscribers and loses 74 subscribers each month.

Subscriber Lifespan = T / (G-L)

Subscriber Lifespan = 5,000 / (191 - 74)

Subscriber Lifespan = 5,000 / 117

Subscriber Lifespan = 42.7 months

Now that we have these two pieces of information…

• The average revenue per newsletter subscriber

• The average lifespan of a subscriber

…We can figure out how to calculate the newsletter subscriber LTV.

To do this, we’ll simply multiply the average revenue per newsletter subscriber by the average lifespan of a newsletter subscriber.

Lifetime Value = Revenue Per Subscriber x Subscriber Lifespan

LTV = RPS x SL

Let’s plug in Jilly’s numbers and find out what her newsletter subscriber LTV is!

LTV = $0.266 x 42.7 months

LTV = $11.35

Jilly’s Jackie Chan newsletter has a subscriber lifetime value of $11.35!

Not bad, Jilly!

With this information, Jilly can now see the incredible opportunity of gaining a single subscriber. For instance, if Jilly accumulates 50,000 subscribers over the lifespan of her newsletter business, that would be $567,500.

If Jilly were to double down on her acquisition efforts and achieve 100,000 subscribers over the newsletter’s lifespan, that would be $1,135,000! All of a sudden—by crunching just a few numbers—we can see how her seemingly insignificant Jackie Chan newsletter has the potential to become a million-dollar newsletter.

Ready to Optimize Your Newsletter LTV?

If you’re ready to launch your first newsletter, or you’re looking to optimize your current newsletter’s LTV, then you need to ensure you’re equipped with the right tools to measure your performance and maximize your subscriber LTV.

With beehiiv you get access to 3D analytics, which allows you to track how every individual email newsletter is performing. That way you can make data-driven decisions about your strategy–like improving your LTV.

beehiiv also offers robust monetization features–like paid subscriptions to generate monthly recurring revenue, and the brand new beehiiv Ad Network, which gives you access to thousands of premium advertisers.

If you want to launch and grow your email newsletter into a real revenue-generating business, then sign up for a free beehiiv account today.