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Customers Lifetime Value with Discount Rate Formula

GoCustomer Lifetime Value 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 = \frac{Cm \cdot CRR}{1 + DR - CRR}

CLV - Customer Lifetime Value?Cm - Contribution Margin?CRR - Customer Retention Rate?DR - Discount Rate?

Customers Lifetime Value with Discount Rate Example

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Here is how the Customers Lifetime Value with Discount Rate equation looks like with Values.

Here is how the Customers Lifetime Value with Discount Rate equation looks like with Units.

Here is how the Customers Lifetime Value with Discount Rate equation looks like.

3.8857 = \frac{8 \cdot 4.25}{1 + 12 - 4.25}

3.8857 = \frac{8 \cdot 4.25}{1 + 12 - 4.25}

3.8857 = \frac{8 \cdot 4.25}{1 + 12 - 4.25}

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Customers Lifetime Value with Discount Rate Solution

Follow our step by step solution on how to calculate Customers Lifetime Value with Discount Rate?

FIRST Step Consider the formula

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

Next Step Substitute values of Variables

∴

CLV = \frac{8 \cdot 4.25}{1 + 12 - 4.25}

Next Step Prepare to Evaluate

∴

CLV = \frac{8 \cdot 4.25}{1 + 12 - 4.25}

Next Step Evaluate

∴

CLV = 3.88571428571429

LAST Step Rounding Answer

∴

CLV = 3.8857

Customers Lifetime Value with Discount Rate 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

Contribution Margin

The Contribution Margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.

Symbol: Cm

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Contribution Margin

Customer Retention Rate

Customer Retention Rate measures the percentage of customers retained in the business out of the total customer base in a given period.

Symbol: CRR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Customer Retention Rate

Discount Rate

Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.

Symbol: DR

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Discount Rate

Other Formulas to find Customer Lifetime Value

Go Customer Lifetime Value

CLV = (ACV \cdot ACL) - CAC

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 Customers Lifetime Value with Discount Rate?

Customers Lifetime Value with Discount Rate evaluator uses Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate) to evaluate the Customer Lifetime Value, Customers Lifetime Value with Discount Rate is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information. Customer Lifetime Value is denoted by CLV symbol.

How to evaluate Customers Lifetime Value with Discount Rate using this online evaluator? To use this online evaluator for Customers Lifetime Value with Discount Rate, enter Contribution Margin (Cm), Customer Retention Rate (CRR) & Discount Rate (DR) and hit the calculate button.

FAQs on Customers Lifetime Value with Discount Rate

What is the formula to find Customers Lifetime Value with Discount Rate?

The formula of Customers Lifetime Value with Discount Rate is expressed as Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate). Here is an example- 9.04918 = (8*4.25)/(1+12-4.25).

How to calculate Customers Lifetime Value with Discount Rate?

With Contribution Margin (Cm), Customer Retention Rate (CRR) & Discount Rate (DR) we can find Customers Lifetime Value with Discount Rate using the formula - Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate).

What are the other ways to Calculate Customer Lifetime Value?

Here are the different ways to Calculate Customer Lifetime Value-

Customer Lifetime Value=(Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost

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Customers Lifetime Value with Discount Rate Formula

​GoCustomer Lifetime Value Formula

Customers Lifetime Value with Discount Rate Example

Customers Lifetime Value with Discount Rate Solution

Customers Lifetime Value with Discount Rate Formula Elements

Other Formulas to find Customer Lifetime Value

Other formulas in Sales Metrics category

How to Evaluate Customers Lifetime Value with Discount Rate?

FAQs on Customers Lifetime Value with Discount Rate

Variable Name

GoCustomer Lifetime Value Formula