gistfile1.js

var ACL = function(){

    // Determine the average customer lifespan. To do this, we have to 
    // determine what constitutes churn and then apply those rules to output 
    // a snapshot of users vs. churn for each cycle.
    
    // 1. After what period of inactivity (no purchases) is a user likely to never 
    // make another purchase (estimated churn).
    // 2. Removal of the app can be considered clear churn.
    
    // To do this, we look at the ratio of users to churn for each cycle.
    
    var churn = [
        {
            users: 10,
            churn: 2
        },
        {
            users: 20,
            churn: 3
        },
        {
            users: 25,
            churn: 2
        },
        {
            users: 50,
            churn: 7
        },
        {
            users: 150,
            churn: 8
        },
        {
            users: 140,
            churn: 6
        }
    ];
    
    // In this example, we've gained 400 users, but lost 28 over a period of six months; 
    // our churn rate is 7%. Our customer lifecycle is 1 / churn rate, which is 14.28 months (cycles). 
    
    return 14.28;

};

var ARPP = 5;            // Average Revenue per Purchase.
var APPC = .25;          // Average Purchases per Cycle
var AVPC = ARPP * APPC;  // Average Value per Cycle
var ALPC = ACL()         // Average Lifespan per Customer

var LTV = ALPC * AVPC; 

// $17.85