"Customer Retention Metrics: Customer Lifetime Value"
Customer Lifetime Value CLV measures how much revenue a single customer generates. Whether you sell a single product or service, or software that is billed annually, this is a metric to track consistently. Ideally, you’ll see CLV increase or remain constant, as a shrinking CLV indicates that you’re either capturing lower-value customers or losing customers faster than in the past.
First, determine the average amount of revenue you can expect to receive from a customer in a given year. You can determine this number by dividing your total annual sales by the total number of unique customers that year.
Then, you need to determine how many years your customers indonesia mobile database stay with your business.
From there, you multiply the average revenue per customer by the average lifetime of a customer to generate your customer lifetime value.
Customer Lifetime Value Formula
Customer Lifetime Value = Customer Value * Average Customer Lifetime
Customer value = average purchase value * average number of purchases.