What is an LTV and can we get one for Broadway?

It’s not a new piece of lighting equipment.

It’s not a “lightweight terrain vehicle.”

LTV is a marketing term known throughout most industries on the planet . . .

But never discussed on Broadway.

Why?  And should it be?

LTV stands for Lifetime Value when referring to a customer.  Sometimes it’s called CLV – Customer Lifetime Value.  Whatever the acronym you use, it’s a big deal.

It means what it says.  It’s the amount of money a customer will spend on your product over the lifetime of your relationship.

For example, if Gillette gets you to buy one razor, they will calculate/predict how long you’ll keep buying their razors.  Then they’ll calculate how much money they can spend on advertising to get you to buy that ONE razor.  Because they know over the “lifetime” they’ll make more.  

They’re not looking to profit off the first sale.  They are looking to profit over the lifetime of the relationship.

That’s why they can spend more in advertising than the price of that one razor to get you to buy it.  That’s also why you see such mega amounts of advertising for lower-priced products – from Coke to Doritos to Burt’s Bees. 

So that got me thinking . . . 

What is the LTV or CLV or all-in-value of an audience member who comes to see a show?

And here’s where we deviate from the razor, chips, or lip balm market.

It’s very rare that a person sees a show more than once.  If you do get a repeat viewer?  You most likely get a big ol’ hit.  (How many times have you seen Les MizPhantom?  Even Kinky Boots had a big return audience.)

So the lifetime value of an audience member at a musical isn’t going to be much more than the price of that first (and only) ticket they purchase.  


Unless . . . Well, we all know that word of mouth is the #1 driver of ticket sales.  That’s what makes a super-sized mega hit.  (And allows you to decrease advertising costs since, once the word of mouth gets going, you can’t stop it.)

So what if there was a way to measure how many tickets an audience member SOLD to other people based on their word of mouth recommendations?

THAT’S how you could know how much you could spend to acquire the person – because if you knew that number, you could calculate how much money that person was responsible for putting into your box office.

Right now there’s no simple e-way to do this.  Maybe someday.  There is the NPS (Net Promoter Score) which measures how passionate your audience is about your show.

But I was still curious.  So I tried to do it the ol’ fashioned way.

I asked my audience.

I did a survey of our A Beautiful Noise buyers and asked them:

  • Do you recommend it?
  • If so (and they DO recommend it), how many friends, do you know for certain, purchased tickets from your recommendations?

Here were the results:

0 friends / family members 7.77%

1-2 friends / family members 22.80%

3-4 friends / family members 27.46%

5-6 friends / family members 7.25%

Over 7 friends / family members 10.36%

I don’t know / I’m not sure 24.35%

Ah-ha!  Some da-ta!

Now, it’s not scientific.  It’s based on their educated guesses.  But still . . . it’s a start.  And I can see that for every person who sees the show, 27% of them are getting 3-4 people to see it . . . and 10.36% are getting over 7 people to see it!

I can multiply that number by our average ticket price AND by our average order value (people don’t come alone, remember), and you can see that the VALUE of a customer is much higher than the one price they pay . . . even if we’re not a razor.

With this data, you can start to determine whether or not you can or should spend more money on advertising . . . because you can see how much that person may be of worth to you over their lifetime.

Again, it’s super rough . . . because we can’t “cookie” word-of-mouth.  But the mere fact of thinking about an ALV (Audience Member’s Word Of Mouth Value), will help you think about how to improve that value . . . which should get you improving the experience of seeing your show.

You can bet that I’ll be surveying the audience at another time to see if I can get these numbers up!

Think about YOU and your ALV.  What was the last show you saw?  How many people are you certain bought tickets as a result of your recommendation?  (Or vice versa, how many tickets did you STOP from being bought?)

Comment below!

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Ken created one of the first Broadway podcasts, recording over 250 episodes over 7 years. It features interviews with A-listers in the theater about how they “made it”, including 2 Pulitzer Prize Winners, 7 Academy Award Winners and 76 Tony Award winners. Notable guests include Pasek & Paul, Kenny Leon, Lynn Ahrens and more.