Decoding the Customer Lifetime Value Formula

Decoding the Customer Lifetime Value Formula

Not every customer brings the same value to your business. Some passively buy one or two things, while others are superfans. You may have a loose idea of who your most valuable customers are, but calculating the customer lifetime value (CLV) is the only way to accurately find those superfans. Once you do that, you can find more leads like them, tailor your product or service, and even win more referrals.

Calculate the CLV of each segment of your business with easy, step-by-step formulas using our free worksheet .

Customer Lifetime Value is the calculation of what a customer might be worth to your business over the course of doing business with you, perhaps over the course of a few years as opposed to a single transaction. This change in point of view often leads business owners from viewing marketing as an expense to viewing it like the investment it can be.