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Member Lifetime Value (MLV)

Updated

Member Lifetime Value (MLV) is the measure of monetary value of a member based on projected length of membership.

 

Calculation: Net member-paid revenue ÷ # of members x AMT = MLV

 

The Total Spending by Contact Report can be used to calculate the MLV. Set the Membership Status criteria to Active and Courtesy to see all dues and non-dues generated by your members.

Results of the Total Spending by Contact Report

To get the Net value, you need to subtract your operating costs from that total. You can get your operating costs from your accountant. This will give you your Net Member-paid revenue.

The End Count can be obtained from the Retention Rate calculation, described above.

AMT can be obtained from the Average Membership Tenure (AMT) calculation, described above.

 

Example:

In 2017, there were 3,000 total members who collectively invested $550,000 in dues and contributed $325,000 in non-dues revenue. The operating costs were $650,000 and the organization’s AMT (average membership tenure) was 17 years.
  1. $550,000 + $325,000 = $875,000 (dues revenue plus member-generated nondues revenue)
  2. $875,000 – $650,000 = $225,000 (total member-generated revenue minus total operating costs)
  3. $225,000 ÷ 3,000 = $75 (net member-generated revenue divided by number of members)
  4. $75 x 17 = $1,275 (average member contributed revenue x AMT)
MEMBER LIFETIME VALUE = $1,275