Customer lifetime value What is customer lifetime value? Customer lifetime value is how much money a business generates from each customer throughout the time period that a person remains a customer of that business.
For example. Let’s say a customer spends $197 a month with you and the average customer stays with your business for 5 years, then your customer lifetime value is $197 * 60 = $11,820.00 per 5 years. Or $11,820 / 5 = $2,364.00 per year. Here is the math again. How to calculate customer lifetime value
Average amount of money customer spends per month or year * how long your customer stays with you.
With the example above: Customer value = $197 per month Customer duration. = 5 yrs. = 12 months * 5 = 60 months Customer lifetime value = 60 months * $197 = $11,820.00 per 5 years.
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