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Customer Lifetime Value Formula

GoCustomers Lifetime Value with Discount Rate Formula

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Customer Lifetime Value is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship. Check FAQs

CLV = (ACV \cdot ACL) - CAC

CLV - Customer Lifetime Value?ACV - Average Cost of Customer Value?ACL - Average Cost of Customer Lifetime?CAC - Customer Acquisition Cost?

Customer Lifetime Value Example

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Here is how the Customer Lifetime Value equation looks like with Values.

Here is how the Customer Lifetime Value equation looks like with Units.

Here is how the Customer Lifetime Value equation looks like.

110000 = (2000 \cdot 60) - 10000

110000 = (2000 \cdot 60) - 10000

110000 = (2000 \cdot 60) - 10000

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Customer Lifetime Value Solution

Follow our step by step solution on how to calculate Customer Lifetime Value?

FIRST Step Consider the formula

CLV = (ACV \cdot ACL) - CAC

Next Step Substitute values of Variables

∴

CLV = (2000 \cdot 60) - 10000

Next Step Prepare to Evaluate

∴

CLV = (2000 \cdot 60) - 10000

LAST Step Evaluate

∴

CLV = 110000

Customer Lifetime Value Formula Elements

Variables

Customer Lifetime Value

Customer Lifetime Value is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship.

Symbol: CLV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Customer Lifetime Value

Average Cost of Customer Value

Average Cost of Customer Value is the average revenue value that each customer brings to your business during a given timeframe.

Symbol: ACV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Cost of Customer Value

Average Cost of Customer Lifetime

Average Cost of Customer Lifetime is a metric which is used in the calculation of customer lieftime value, which refers to the average cost spent on a customer in a period.

Symbol: ACL

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Cost of Customer Lifetime

Customer Acquisition Cost

Customer Acquisition Cost is the amount of money a business spends to get a customer to purchase its products or services.

Symbol: CAC

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Customer Acquisition Cost

Other Formulas to find Customer Lifetime Value

Go Customers Lifetime Value with Discount Rate

CLV = \frac{Cm \cdot CRR}{1 + DR - CRR}

Other formulas in Sales Metrics category

Go Compound Annual Growth Rate

CAGR = (({(\frac{EV}{SV})}^{\frac{1}{n y}}) - 1) \cdot 100

Go Customer Selling Price

CSP = CP + (PM% \cdot CP)

Go EBIT

EBIT = R - OPEX

Go Market Penetration

MP = (\frac{n}{TP}) \cdot 100

How to Evaluate Customer Lifetime Value?

Customer Lifetime Value evaluator uses Customer Lifetime Value = (Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost to evaluate the Customer Lifetime Value, The Customer Lifetime Value formula is defined as a metric that measures total revenue a business can expect to generate from a customer over the course of their relationship with the company. Customer Lifetime Value is denoted by CLV symbol.

How to evaluate Customer Lifetime Value using this online evaluator? To use this online evaluator for Customer Lifetime Value, enter Average Cost of Customer Value (ACV), Average Cost of Customer Lifetime (ACL) & Customer Acquisition Cost (CAC) and hit the calculate button.

FAQs on Customer Lifetime Value

What is the formula to find Customer Lifetime Value?

The formula of Customer Lifetime Value is expressed as Customer Lifetime Value = (Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost. Here is an example- 110000 = (2000*60)-10000.

How to calculate Customer Lifetime Value?

With Average Cost of Customer Value (ACV), Average Cost of Customer Lifetime (ACL) & Customer Acquisition Cost (CAC) we can find Customer Lifetime Value using the formula - Customer Lifetime Value = (Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost.

What are the other ways to Calculate Customer Lifetime Value?

Here are the different ways to Calculate Customer Lifetime Value-

Customer Lifetime Value=(Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate)

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: Unit

Customer Lifetime Value Formula

​GoCustomers Lifetime Value with Discount Rate Formula

Customer Lifetime Value Example

Customer Lifetime Value Solution

Customer Lifetime Value Formula Elements

Other Formulas to find Customer Lifetime Value

Other formulas in Sales Metrics category

How to Evaluate Customer Lifetime Value?

FAQs on Customer Lifetime Value

Variable Name

GoCustomers Lifetime Value with Discount Rate Formula