toss MTVi: A New Metric for (opens in new tab)
Toss has developed MTVi (Mid-term Value - incremental) to quantify the financial impact of specific services within its platform, moving beyond the limitations of traditional LifeTime Value (LTV). By focusing on the incremental value generated over a one-year period, the metric allows the company to justify services that may lose money individually but drive significant ecosystem-wide growth. This framework provides a data-driven standard for prioritizing features and setting marketing budgets based on actual financial contributions. ### Limitations of Traditional LTV * **Time Horizon Mismatch:** Traditional LTV projects value over 3 to 5 years, which is too slow for Toss’s rapid iteration cycles and fails to reflect the immediate impact of service improvements. * **Investment Recovery Gaps:** Standard LTV models often benchmark marketing costs (CAC) against long-term projections, making it difficult to evaluate the efficiency of short-term experiments. * **Lack of Incrementality:** LTV measures average user value but cannot isolate the specific "extra" value created by a single service, making it impossible to distinguish between a service's impact and natural user growth. ### Defining MTVi and DID Methodology * **Incremental Focus:** MTVi is defined as the net financial value generated over one year specifically because a user experienced a new service, rather than just the average revenue of a user. * **Quasi-Experimental Design:** Since A/B testing every service combination is impossible, Toss uses the Difference-in-Difference (DID) method to compare "Newly Activated Users" (NAU) against "Never" users. * **Segment-Based Analysis:** To prevent bias—such as highly active users naturally gravitating toward more services—Toss segments users by age and historical activity (e.g., app open frequency) to ensure "apples-to-apples" comparisons within identical cohorts. ### Organizational Impact and Strategy * **Unified Decision Metric:** MTVi provides a "common language" for different product teams (silos), allowing them to compare the value of disparate services—like pedometers versus remittances—on a single financial scale. * **Efficiency Benchmarking:** The metric establishes a hard ceiling for investment; for example, Customer Acquisition Cost (CAC) is strictly managed so it does not exceed the calculated MTVi. * **Platform-Wide Valuation:** By calculating both direct revenue and indirect spillover effects, Toss can prove the financial viability of "loss-leader" services that provide user benefits but increase overall app engagement and cross-service usage. For organizations operating complex multi-service platforms, adopting an incremental value metric like MTVi is essential for moving beyond isolated P&L statements. Data teams should prioritize quasi-experimental methods like DID and rigorous user segmentation to accurately map how individual features influence the broader financial health of the ecosystem.