A Key Metric in Building and Scaling Businesses

Smartphone, smartwatch and cup of coffee
Barry Kelly
February 17, 2016

If you have experience selling digital or physical products, you are familiar with an enormously critical metric – Customer Lifetime Value (CLV). Whether you are operating a recurring subscription business or selling individual widgets, this valuable metric helps keep the entire lifecycle of your customer acquisition and retention rates in perspective. It informs not only how much you can afford to spend to acquire a new customer but also how successful you are in keeping and expanding your relationship with them.

For organizations involved in the business of online learning, this may be the metric you currently use. At Thought Industries, we give it a more contextual name – Learner Lifetime Value.  The difference may feel like semantics, but the relabeling creates a paradigm shift of thinking that will help you build a high-margin learning business.

Learner lifetime value is a metric that factors all of the same inputs as customer lifetime value, but combines both individual sales and recurring subscription revenues in order to measure the success of your online learning operation.  Whether you are in the business of educating the world’s next master brewers or helping the aviation industry get up-skilled on the newest technology, the learner lifetime value metric should be front of mind. Packaging, promoting and selling learning has become big business. Organizations that do well are those that are great marketers and are able to offer a great learning experience and deliver on tangible learning objectives the user will be able to utilize to further their careers or fulfill their passions.

To positively effect learner lifetime value and to understand the levers in play we have identified four areas that have a big impact on this metric.


Effective marketing is critical for any business and it’s no different in online learning.  95% or more of your marketing will be generated online and you will need a multi-channel, multi-touch strategy.  Buying an online course is not an impulse purchase, nor is it a commodity item.  Help your prospects understand what the experience will be like, what they will learn and how it will make a material difference in their lives.  In most cases this takes more than one communication. Bundle, package and offer incentives because enticing promotional offers can lead to the acquisition of new customers.

Point of Purchase

The browsing, buying and check-out process for online learning is in many cases an afterthought. Think about your last online product purchase.  Were you provided with an upsell option? Did you hear about related products? Was there a discount if you added more to your cart?  Checkout and POP optimization has become big business and it works. Think about the learner as they purchase. Can you offer related courses now?  Are there materials required to complete the course and can you make them available as part of the purchase? Can you upsell expert access as a premium?  Is there a recurring subscription option? These are all core offerings that people who invest in themselves will be more inclined to invest in. Don’t miss out on that opportunity.

Quality of Product

If you have taken care of the first two items you are in a great position. But remember if the learning experience is poor then you can forget the lifetime part of the equation. There are four boxes that need to be checked to ensure a happy customer and a repeat buyer.

  • Platform: Offer a learning experience that justifies the cost. Great user experience, clear navigation and engaging features.
  • Content: It’s critical that the content is well authored and dynamically presented. Step away from the clip art – quality imagery goes a long way.
  • Subject Matter Expertise: Who are your course authors or instructors? Are they recognized as leaders and committed to offer a quality learning experience?
  • Outcome: Did you fulfill your product promise? Make sure to poll your learners on completion and determine whether or not you met their expectations.

Repeat Purchase

If you did a great job and delivered on your promise to impart critical knowledge to your learners, repeat purchases should be on the cards. If your content curation process is of a high-quality you will know what they need next and when. Gather data from your learners and offer incentives to sign up for what’s next. Offer certificates of completion and badges they can share. Build programs of study and help them grow.

Learner lifetime value is a core metric and one to keep front of mind at every stage in the growth of a learning business. There is a lot of great information on CAC (Cost to Acquire) and customer lifetime value out there and how to calculate it. In the next installment we will look at another key metric in CAC and learner lifetime value measurement and that is recovering your CAC from learner lifetime value.

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