Calculate Customer Lifetime Value

You Need To Know Your Customer Lifetime Value

2 September 2020

How do you decide which customer is more important or who give you better value? Is someone spending RM1,000 a year better value than someone spending RM200 monthly? Or is someone make 3 purchase a year better value than 1 purchase a year?

There are many metrics in marketing but there is one you must know and use, Customer Lifetime Value (CLV), the stat that can tell you what value a customer brings to your company over the span of their relationship with you.

 Customer Lifetime Value

To be more specific, Customer Lifetime Value is the projected revenue a company expect to generate over the entire of their business relationship with the average customer. Knowing the CLV allows you to know

In order to calculate CLV, we need the following historical data for more accurate calculation

Customer Lifetime Value = Value of average sale X Average number of transactions X Customer retention time period

 Pyramid Customer Lifetime Value

Customer lifetime value can be interpreted in many ways. Understanding CLV over time helps business to plan and implement better campaign to build customer loyalty, increase sales and improve business margin.

Need help on determining your Customer Lifetime Value and segment your database for targeted marketing? Talk to us and we can work it out for you.

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