Customer Lifetime Value Calculator
Customer Life Time Value ($, £ etc.): 0
In the customer lifetime calculator above fill in the following fields:
- Average purchase value. You can calculate this value by looking at your total annual sales and dividing this by your total number of annual sales. Total Value Annual Sales / Total Number of Annual Purchase. This can be added in any currency. The final calculation of your LTV will be in the unit of currency you used here.
- Purchase Frequency. How many times on average does a customer buy a year. This can be calculated by dividing your total number of purchases in a year by your number of customers in a year. Total Number of Purchases in Year / Total Number of Customers in Year.
- Average Customer Life Span. How long on average your customers keep buying from you in years on average.
- Press the “Calculate” button.
- Your Customer Lifetime Value will calculate in the unit of currency you used for your average purchase value.
Understanding Customer Lifetime Value
Understanding Customer Lifetime Value (LTV) is essential so you can determine how much you can afford to spend to acquire new customers.
The higher your customer lifetime value the more you can spend to acquire customers profitably.
If you can spend more than your competitors to acquire customers you can dominate your market.
