Customer Lifetime Value (CLV) Calculator
Why should i use it?
Using a Customer Lifetime Value (CLV) Calculator is essential for businesses aiming to maximize profitability and growth. It enables you to estimate the total revenue a customer is expected to generate during their relationship with your business. By knowing CLV, companies can make informed decisions on marketing spends, customer retention efforts, and resource allocation. Understanding CLV helps prioritize high-value customers, optimize strategies, and achieve sustainable long-term success in a competitive market.
How the tool works
The Customer Lifetime Value (CLV) Calculator estimates the total value a customer brings to a business over their relationship. Users input the **average purchase value**, **purchase frequency**, and **customer lifespan** (in periods, e.g., years). Optionally, you can add a **gross margin percentage** to focus on profit rather than revenue. When you click “Calculate,” the calculator multiplies all values (with margin as a percentage) to estimate CLV. If the margin is omitted, it defaults to 100%. The CLV is then displayed in dollars.