Average Account Lifespan

Average Account Lifespan is how long a paying account is expected to keep paying — the inverse of your churn rate. At a 6% monthly churn rate, the average account lasts about seventeen months before it cancels.

It is the bridge between a churn percentage and a time horizon. 'Six percent monthly churn' is abstract; 'the average customer stays seventeen months' is something you can plan pricing, payback and forecasting around.

Divide one by the monthly churn rate. A 6% monthly churn rate gives roughly 1 ÷ 0.06 ≈ 16.7 months of expected lifespan. Because it is derived from churn, it inherits churn's volatility — smooth the churn input before reading too much into month-to-month moves.

Use it to sanity-check cLTV: lifetime value is essentially ARPA times gross margin times this lifespan, so an implausibly long lifespan is usually what inflates an implausibly large cLTV.