Calculating Your Lifetime Customer Value

In order to calculate the lifetime value of your customers, you will have to spend some time to
mine your business and sales data. At a bare minimum, you will need to know your amount of
sales for a specific period of time, the amount of customers it took to generate those sales and
the total value of those sales.

The formula above should be used as a rough estimate only. In order to get a more accurate
figure, visit one of the resources listed on the additional resources page.

Its important to mention that by using this formula, youre only calculating the customer value
over the time period you used throughout this example. If you only used a time period of 90
days, then youve only calculated the customers value over that time period. In order to
calculate a true lifetime value you would have to have all your business data from the first day
you opened for business until today.



Step 1: Calculate Average Revenue Per Sale


(Select a
specific
time frame)

Total Value of all sales :

(Insert Date - From:________ To: _________)



Divided By:


(Use the
same time
period as
above)

Number of transactions you made:

(Insert Date - From:________ To: _________)



Equals:



Average Revenue Per Sale =














***Important Note*** Keep in mind that youve only just calculated the customer value over the
time period that you chose to use in the formula.





Step 2: Calculate Transactions Per Customer


(Use the
same time
period as in
Step #1)

Number of transactions you made:

(Insert Date - From:________ To: _________)



Divided By:


(Use the
same time
period as
above)

Number of customers you had:

(Insert Date - From:________ To: _________)



Equals:



Average Transactions Per Customer =



Step 3: Calculate Your Customer Lifetime Value


(From Step #1)

Average Revenue Per Sale =



Multiplied By:


(From Step #2)

Average Transactions Per Customer =



Equals:



Customer Lifetime Value =