Curly spends $10,000 per year with the company for 5 years, totaling $50,000 in spending. With a 10% profit margin, the company's profit from Curly over the 5 year period is $5,000, which represents Curly's lifetime value to the company.
How to Calculate Lifetime Customer Value in 5 Easy Steps
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9. OK, Let’s Make it Real
Typical customer Curly spends
$10,000/year with you
Curly is with you for five years
Your profit margin is 10%
Lifetime value of Curly is
($10,000 * 5) * .1 = $5,000
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