Leverage Lifetime Value in Investment Decisions: How a D2C Business Unlocked Its Subscription Model and Grew Subscription Revenue to 50% Without Sacrificing Transactional Sales

Client Background

• Type of Business: Direct-to-Consumer (D2C) transactional business.
• Business Model: Mix of single transactions ($20-$30) and monthly subscriptions ($10-$50).
• Acquisition Channels: Paid digital (7+ channels), TV, email, and SMS.
• Geographic Focus: United Kingdom (UK).

Problem

• Introducing subscriptions increased CAC and lowered conversion rates, impacting acquisition growth.
• Unclear strategy for transitioning transactional customers into subscribers.
• Limited insights into the impact of different acquisition channels on LTV.

Goal

‍Increase customer lifetime value (LTV) and engagement while maintaining acquisition volumes.

Key Pain Points

• Needed a balance between transactional revenue and subscription growth.
• Uncertainty in how to optimize for LTV without hurting acquisition efficiency.
• Limited CRM strategies to upsell customers from single to multiple transactions.

Machine Learning for LTV Calculations

Built an LTV prediction model to guide acquisition strategies.

Performance Optimization

• Shifted performance tracking from CPA to LTV-driven acquisition goals.
• Built real-time server-to-server LTV events to provide accurate feedback to marketing channels.
• Designed landing pages optimized for different goals (transaction-only vs. transaction & subscription).

CRM & Upsell Strategies

• Transitioned customers from single transactions to multiple purchases.
• Developed new creatives to test subscription vs. transactional models.
• Created targeted acquisition funnels by channel.
• Implemented upsell mechanisms between transactions and subscriptions.