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 ```I run a social interactive / 'dating' site which has now been running for about one year. It has become profitable and the business model works, however, now we are satisfied with the business model itself we need to invest in an online marketing plan that is based on a cost to aqcuire a free member, against the project eventual income of that free member if and when they upgrade to a paying member. My main question is how do I ascertain the 'lifetime value' of a member? I keep monthly figures of new members, sales, etc etc currently work on the following calculation in order to value the free signups made that month: Example: March 2006 Expenditure Google Adwords £151.73 3rd Party Video Services £248.24 Nightclub rental (one-off) £425.53 Hosting £700.00 TOTAL £1,525.50 Income £3,422.64 Profit = £1,897.14 New free members that signed up that month were 2,140 So I work on the following calculation for each month in question: Running costs of £1,525.50 divided by the number of new members that month (2,140) = £0.71 Income of £3,422.64 divided by the number of new members that joined that month (2,140) = £1.60 Therefore, profit of each new member that joins that month is £0.89 Naturally, the income didnt always come that month from a new member, maybe some new members and exisiting members, but its the only way I feel you can calculate things on a monthly basis. I therefore deduce that the cost to acquire free members, via Google Adwords, Banners, Co-Reg's etc should not rise above £0.71 I'm not sure if this is the best way to work. I a nutshell, I am trying to find a true calcualtion that allows me to decide how much marketing money I should spend on acquiring a new member, in other words, the maxium I would pay to get a free member, and the likely profit from that. I do have more information available if needed, and if you are able to advise effecting co-registration programmes or guaranteed signups etc / or any other solid marketing information that other similar sites are using, it would be most helpful! Many thanks for your time. Regards Martin```
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