calculating the value of a new customer
I have a business where users subscribe and pay a monthly fee. I am trying to determine the average value of a new customer based on the length of time that they subscribe. The problem is that most of the customers are still with us, so I am unsure how to calculate this. What we know:
Date joined for all customers
Date unsubscribed for customers who have closed account.
% of customers who have closed their account
We have calculated the average length of a subscription by adding up all the days subscribed and dividing it by the total number of customers, but if we include all the customers who are still with us, the data is skewed down because it assumes that all our current customers closed their accounts on the day we did the calculation. If we exclude all our current customers it is skewed the other way because they form the bulk of the data.
I hope this is clear. So just to recap, we are trying to determine how long on average a customer will subscribe to our service. Is it possible with the data we have?
thanks in advance