Free accounts for students?
mixmax: T = turnover per client per monthE = variable expense per client per monthA = Average lifetime of a customer in monthsP = Percent of students that turn into paying customersAs = Average lifetime of a student account before it is either terminated (graduated) or turned into a paying accountThe lifetime value of a customer is (T-E)xA
The cost of a student account is ExAs
The acquisition cost of one customer that has previously been a student is ExAs/Pif ExAs/P < (T-E)xA then you should do it.Stick the numbers into an excel sheet and play around with the basic assumptions. Chances are that your answer will be obvious.Note I had to use x for multiplication since the character normally used for this is used for markup :-(