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Determining Your Customer Lifetime Value (CLV) Calculation for Your Business

At Responsify we help our clients attract new customers by leveraging Inbound Marketing. To help them get the most out of their marketing budget, we gather a metric called Customer Lifetime Value, also known as CLV. This metric helps determine the best strategy to attract and close their highest yielding customers, so they can grow their business as fast as possible. In case you need a hand calculating your Customer Lifetime Value (CLV), we made this post to help you do just that!

What is my company’s Customer Lifetime Value (CLV)?

Customer Lifetime Value is a metric that represents an educated estimate of the financial value a business will acquire from their entire relationship with a customer.
 
 

How to calculate my company’s Customer Lifetime Value (CLV)?

If you sell multiple services, you may have multiple customer segments. First you’ll want to calculate the value for each segment, and then average them together if needed. We created this graphic formula to help you calculate your CLV:

customer lifetime value

 

Why is it important to calculate my company’s CLV metrics?

Calculating your CLV is one of the most critical metrics to gather as you develop your business. It helps your team make more informed business decisions, determine sales and revenue potential, and align your marketing and sales efforts. It’s important to note, your CLV may change as your business evolves. Updating it annually or even quarterly can help sharpen your business’ focus.

If you need help calculating your company’s CLV metrics, feel free to book a time to speak with us. We’re happy to help any way we can!