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Measure the effectiveness of marketing activities. By analyzing the entire customer relationship process, we can estimate whether a given buyer actually generated more profit for the company than the cost of acquiring it. How to calculate customer lifetime value? There are several methods of calculating the lifetime value of a customer. , because some models of calculating the CLV indicator are quite complicated. Below is a standard formula to help you calculate customer lifetime value.

Customer lifetime value = average order cost x average transaction repeatability x retention period Average order cost this is the average value of a single purchase  the average number Phone Number List of frequency of purchases made by the customer in a given period Retention period this is the period during which the customer remains active in relation to the brand, i e. the number of years in which the customer makes purchases in a given company We will illustrate this equation on the basis of an example.



Let's assume that the average order value is PLN , and the average repeatability of the transaction is orders a year. The average retention period is years. Hence, it is easy to calculate that the lifetime value of this customer is × × = PLN , How to increase customer lifetime value? Since we already know what the customer lifetime value is and we know the formula that will help us calculate it, there is nothing left but to think about how to improve the customer lifetime value. You never get a second chance to make a first impression.