Calculators / Customer Lifetime Value Calculator
Customer Lifetime Value Calculator
Businesses that only look at the first sale systematically underspend on acquisition, then lose to competitors who know what the second and third purchase are worth.
Work out yours
$1,650
One customer is worth about $1,650 over the relationship.
Spend against the profit figure, not the revenue figure. A sensible ceiling on acquisition is about a third of lifetime profit, which leaves room for delivery and for being wrong.
What to do with this number
The gap between lifetime value and first-sale value is where most small businesses leave money. A coffee shop has a tiny ticket and a large lifetime value. A roofer is the reverse. Knowing which one you are changes whether you should be chasing new customers or looking after the ones you have.
Lifetime value rises fastest when people come back on purpose
Not by chance, and not because they happened to remember you. A scheduled recall with a specific reason to return converts people you already paid to acquire, so the cost is close to nothing and the close rate beats cold by several times.
Follow-Up and Recall Automation, $800 one time
See what it would take, free →About Follow-Up and Recall AutomationThe other calculators
- Customer Acquisition Cost CalculatorFree CAC calculator.
- Marketing Budget CalculatorFree calculator that sets your monthly marketing budget as a share of revenue, adjusted for how fast you are trying to grow.
- Break-Even CalculatorFree break-even calculator for small business.
- Price Increase Impact CalculatorFree calculator showing exactly how much of your customer base you could lose after a price increase and still make the same profit.
- Small Business Growth CalculatorTies all of these together and tells you how many customers you are short.
Definition and background: Customer Lifetime Value explained. Part of the small business glossary.