This metric, the average amount spent by a member on their first transaction, can help to manage cash flow as you will know how much revenue you are likely to get back each month. You will also need a good understanding of how much you are spending on your traffic and the number of basic members you need to drive in order to achieve the desired number of upgrades, based on your conversion rates.
The formula to calculate average initial transaction value is:
Initial revenue / number of initials
For example, if your initial revenue last month was £4000 and the count on initials last month was 100, your average initial transaction value is £40
£4000 / 100 = £40
