Negative Customer Lifetime Value

PUS5Y DE5TROYER·12/18/2015, 7:37:16 PM·2 votes·1,907 views

If you are an entrepreneur or into business, you may have heard of customer lifetime value. This concept is essential to growing a thriving business model. Riot has created an amazing business model, but in the war on toxicity, I am seeing a unique phenomena emerge, the transmutation of customers from a positive to negative lifetime value. I have seen it because I it happened to me. I trolled flamed and fed with the best of them, and got my main banned. Yeah I deserved to be banned, I broke riot's rules fair and square. But instead of giving warning or 3day ban week ban or whatever, I was instantly escalated to perma ban status. Whether such action was the right thing for riot to do is not an issue, I love this game and am going to keep playing. I am not going to feed or troll anymore, so I have been successfully reformed by the system :)

  But instead of reforming me with increasingly worse punishment, the instant permaban has ingrained in me the idea to never spend any money with riot, never put my card info in again, and to warn everyone I play with that riot can and will destroy their account at their discretion. So here I am, a loyal player who loves riot and their game,  plays all the time, even reformed to not be toxic; but at the same time, never spends money and actually discouraging others to not spend money either. The emergence of a negative customer lifetime value phenomena. I gotta admit I am kinda fascinated.... ![Velkoz](https://ddragon.leagueoflegends.com/cdn/16.11.1/img/champion/Velkoz.png)

42 Comments

ThePartyLeader12/18/2015, 7:58:55 PM7 votes

I have kicked drunks, ragers, and racist out of my store. Not because I didn't want there money, but because my main customers wouldn't shop here if they had to shop along side these asshats and degenerates.

Jubbinaut12/18/2015, 8:29:03 PM4 votes

Something to keep in mind: Riot's player-conversion rate is abysmal - somewhere in the neighborhood of 3.75% as of last year.

Which actually means that most players have a low-to-negative customer lifetime value.

EvilDustMan12/18/2015, 10:33:08 PM3 votes

Let me sum up this thread:

'I thought I could get away with feeding because I would get a punishment before my permaban. I was wrong. I am not going to feed anymore, but I no longer want to spend money on League. I feel this could be a poor business model for League.'

However, the business model for League DOES seem to be 'keep players happy'. Except for people playing against a Riven.

BlueThingamajig12/18/2015, 7:49:06 PM2 votes

It's easy to think of your direct impact, but I don't think you have taken into account the unintentional impact on players you were toxic to before your reform. I don't have any numbers to support this, but I'd be willing to be that the amount of money that you discourage others from paying is less than the amount of money people didn't want to pay after being in a game with the past-toxic you. Essentially, you go from a significant net-negative to a small net-negative through the permaban.

Hell, comparing to the amount of time I've spent on the boards and game, taking up all that server space, to how much RP I've purchased, I'm probably a small net-negative player.

Korillo12/18/2015, 7:44:42 PM2 votes

Honestly it sounds like you are the type of player they don't want in their game at all. They've already permanently banned you twice? They don't want your money, they want you out :p.

Maybe you see it as a loss of income to them, but the rest of the community benefits by getting players like yourself out of the game and that is a much bigger win for Riot. Now you say you'll come back and not be toxic, so if that's true then that is also a win.

EvilDustMan12/18/2015, 8:25:52 PM1 votes

I suppose. But since people who have been permabanned is below 1% and the amount of players you'll convince not to spend money is below .0001%, the effect is negligible. And their studies show that by removing the toxic element, they actually increase their revenue by keeping normal players longer. So I dispute your claim, because you say you have reformed. They've removed a toxic element and that will affect more players than you will convince not to buy RP.

By removing a toxic player, they improve the game for 4-9 people over quite a few games. Let's be generous and say 300 more games. So they improve the game for 1200-2700 players. You won't convince that many people not to buy RP.

Hunts and Dips12/19/2015, 4:08:50 PM1 votes

Blatant intentional feeding always goes straight to a permanent ban because it has the highest impact on games.