Customer Lifetime Value (CLV) is an estimate of the total profit a customer will generate over their entire relationship with your company. It gauges the long-term health of your companies relationships with your customers.
There are many different ways to calculate CLV, and those calculations can range from simplistic to incredibly advanced. With that said, my CLV calculator is very simplistic and is best suited for the “mom and pop shop” small businesses. With this calculator, it will give you an approximation of how profitable your current customers are. You’ll then want to come up with ideas on how to build a more profitable customer relationship. (I.e. Keep them coming back/repeat customers.) That will increase your CLV and your profits.
For this calculation, you will need –
- Your Total Revenue from Last Year
- Amount of Customers That Made a Purchase Last Year
- Total Number of Orders you had Last Year
Average Order Value: $
Customer Value: $
Customer Lifetime Value(CLV): $