asked in category: General Last Updated: 16th February, 2020

# How do you calculate the average lifetime of a customer?

To calculate customer lifetime value you need to calculate average purchase value, and then multiply that number by the average purchase frequency rate to determine customer value. Then, once you calculate average customer lifespan, you can multiply that by customer value to determine customer lifetime value.

Keeping this in view, how do you calculate the value of a customer list?

Once you determine the annual average cost to get a customer across all media, it is simple to multiply that average cost by the number of buyers to put a value on your customer list. Example: Your company has 100,000 buyers, and it costs you \$10 on average to get a customer.

Furthermore, what is customer lifetime value with example? For example, if a new customer costs \$50 to acquire (COCA, or cost of customer acquisition), and their lifetime value is \$60, then the customer is judged to be profitable, and acquisition of additional similar customers is acceptable. Additionally, CLV is used to calculate customer equity.

Thereof, what is the average customer lifetime value?

The total revenue you can expect to get from each customer is your average order value divided by one minus the repeat purchase rate, or \$50 / ( 1 - 0.1) = \$55.56. Subtract your customer acquisition cost from that, and you get a customer lifetime value of \$40.56.

How much is a customer list worth?

This is your individual customer's worth. Multiply the individual's worth times the number of clients you have. For example, if the individual's worth is \$750 you would multiply that amount by 12,470 customers to arrive at a base worth of \$9,352,500.

### What is the CLV formula?

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16th February, 2020

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