Customer Lifetime Value Calculator
Customer Lifetime Value Calculator
Component |
Description |
Average Purchase Value |
The average value of a purchase made by a customer. |
Average Purchase Frequency Rate |
The average number of purchases made by a customer in a given period. |
Customer Value |
The total value a customer brings during their relationship with the business. |
Customer Lifespan |
The average number of years a customer continues to buy from the business. |
Customer Lifetime Value (CLV) |
The total value a customer is expected to bring during their entire relationship with the business. |
Formula |
CLV = Average Purchase Value × Average Purchase Frequency Rate × Customer Lifespan |
Purpose |
Used to measure the total revenue a business can expect from a customer over the duration of their relationship. |