Customer Lifetime Value (CLV) What is it?

So many terms SMB, ROI, CRM. It’s an abbreviated world these days. While many of us are familiar with the first three, do you know CLV? Sure, the title gives it away, but do you know how to calculate the CLV for your client-base?

Most business owners probably have this value for their customers in the back of their minds but have never physically calculated the customer lifetime value for their business.

For those that do not know here are a few questions to help you work out the CLV for your customers.

1. What does your average customer spend with you on a monthly basis? $__________

Multiply question 1 by 12 (12 months) in a year                                      = $_________

2.  How many years do you keep the average customer?                                _________

Multiply your 12 month $ value by the answer to Q#2                          = $__________

This is your Customer Lifetime Value.

Always a good number to know!

I always thought I knew this number. I took the time to calculate it for my business. Wow, was I off — just goes to prove a little bit of leg work, is worth the effort to grow your business!


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