Customer Lifetime Value Calculator (CLTV)

Customer lifetime value is the predicted net Profit attributed to the entire future relationship with a customer. Lifetime customer value calculator also defines the upper limit for Customer acquisition.

The LTV ratio measures the relationship between the Lifetime Value (LTV) of a customer and the Cost to Acquire a Customer (CAC). It is calculated by dividing LTV by CAC. A higher ratio indicates that a company earns much more from a customer than it spends to acquire them, suggesting a sustainable business. For a detailed explanation on calculating and interpreting this ratio, check out this our blog .

Transaction Frequency is the average number of transaction a customer does in a year.

Average retention is the average number of years a customer stays (i.e. continues to pay for product or service).

Customer value is calculated as the product of average customer longevity and customer value. The outcome provides you with the amount of money an average customer will likely bring in for your business throughout their dealings with you.

The total predictable revenue your company can get from a customer throughout their lifetime as a paying customer is known as customer lifetime value, or CLV. A customer’s lifetime, for instance, would last for one year if they subscribed to one of your items on a one-year plan.

As it enables you to optimize the value of each client connection, customer lifetime value is crucial. This indicates that you’re giving them a better experience that keeps them returning for more, which can also help raise the caliber of your goods and services.

Customer value is calculated as the product of average customer longevity and customer value. The outcome provides you with the amount of money an average customer will likely bring in for your business throughout their dealings with you.