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Calculates the total profit from a customer across their entire relationship with a business. Determines customer acquisition spending justification.
Stapsgewijze handleiding
- 1Average purchase value per transaction
- 2Multiply by average purchase frequency per year
- 3Estimate customer relationship length in years
- 4Subtract customer acquisition and service costs
Uitgewerkte voorbeelden
Invoer
$500/yr x5yrs
Resultaat
$2500CLV
Veelgemaakte fouten om te vermijden
- ✕Only considering one-time purchase value
- ✕Not accounting for referral value of satisfied customers
Veelgestelde vragen
What's a healthy CLV to CAC ratio?
Aim for 3:1 minimum; successful businesses achieve 5:1 or higher CLV to customer acquisition cost.
How do I increase customer lifetime value?
Improve retention through service quality, upsell higher-value products, and increase purchase frequency.
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