Member Lifetime Value estimates the net economic value a member contributes over the full relationship. For a fast, directional read, many teams use MLV ≈ average annual net revenue per member × average membership tenure. If you have the data, build a more defensible version:

• Define net revenue per member: Sum member-derived income (dues and non-dues such as events, education, services, add‑ons, and merchandise) and subtract attributable operating costs to serve. Netting costs matters to avoid overstating value. External examples and guidance emphasize using net, not gross, when possible.
• Average membership tenure: Calculate the average number of years a member remains active. Pair it with retention and churn rates so tenure assumptions stay grounded in reality.
• Cohort and retention dynamics: Build cohorts by join date or acquisition channel. Model year‑by‑year retention and expected spend per member to reflect how engagement and pricing evolve over time.
• Discounting: When projecting multi‑year value, discount future cash flows to present value to reflect the time value of money.
• Attribution and segmentation: Attribute revenues and costs to key journeys and channels where feasible. Segment MLV by member type, tenure band, product mix, or acquisition source to uncover variation hidden in the average.

Practical formulas you can use:

• Simple: MLV = (Total member-derived revenue − attributable operating costs) ÷ active members × average membership tenure.
• Cohort model: Sum over years: (Expected net revenue per retained member in year t × retention probability in year t) ÷ (1 + discount rate)^t.

Data you should validate before trusting MLV: active member counts, treatment of partial-year joins, what costs are included or excluded, and whether non-recurring windfalls are removed from the numerator.

Once MLV is measurable, use it to guide where and how to grow.

• Acquisition efficiency: Compare MLV by channel to acquisition cost. Favor channels where MLV to acquisition cost clears your hurdle (for example, >3x).
• Pricing and packaging: Use MLV by segment to test pricing changes, bundles, or tiered benefits. High‑value segments can support premium offers if the value story is clear.
• Cross‑sell and engagement: Identify products or programs most correlated with high MLV and build onboarding, education, and lifecycle touches that increase adoption in the first 90 to 180 days.
• Retention investment: Quantify the economic lift from marginal retention improvements. For long-tenure segments, small gains in renewal rate often drive outsized value.
• Forecasting and targets: Roll MLV by segment into your growth model to set realistic revenue targets and capacity plans. Track leading indicators like activation milestones and early product usage.
• Benchmarking: Monitor MLV quarterly. Report the average, the median, and the top and bottom quartiles to catch mix shifts early.

Implementation tips:

• Start simple, publish the definition, and version-control your MLV model.
• Build a cohort view in your BI tool that shows retention curves and per‑member net revenue over time.
• Automate data pulls for dues, fees, event income, and direct costs to keep MLV current.