Customer Lifetime Value Calculator

Enter the customer value per year or time period and the average customer life span into the calculator to determine the customer lifetime value.

Customer Lifetime Value Formula

The following formula is used to calculate the customer lifetime value.

CLTV = CV * ALS

  • Where CLTV is the customer lifetime value
  • CV is the customer value per year or time period
  • ALS is the average life span in years or time frequency

FAQ

What is a customer lifetime value?

A customer lifetime value is the total value of a customer on average over the lifespan of that customer. In other words, how much value can be extracted from a customer over the life of that customer. In this case the life of the customer is the time spent purchasing and using a service or good/

What is the average value per customer?

The average value per customer is typically measured as the total money spent by the customer over a given time period.


Customer Lifetime Value Example

The following is an example of how to calculate the customer lifetime value.

How to calculate customer lifetime value?

  1. First, calculate the average customer value.

    For this example, we will be using the average customer value over a 1 year period. After analysis we find this to be $100.00.

  2. Next, determine the average lifespan.

    Determine the average length of time a customer spends with the product. For this example we assume we have loyal customers and they stay on average for 10 years.

  3. Finally, calculate the CLTV.

    Using the formula above, we find that the CLTV is equal to $100.00/year * 10 years = $1,000.00.


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