How to Calculate CLV?

CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan

Average Purchase Value = Total Revenue ÷ Number of Purchases

Purchase Frequency = Number of Purchases ÷ Number of Customers

Customer Lifespan = Average time a customer stays active

CLV = (Average Order Value × Purchase Frequency) × Customer Lifespan

CLV = Average Revenue per Customer × Customer Lifespan

CLV = (Average Purchase Value × Average Purchase Frequency) × Average Customer Lifespan

CLV = Gross Margin per Customer × Customer Lifespan

CLV = (Revenue per Customer × Gross Margin %) × Customer Lifespan

CLV = Σ [Cash Flow at Time t ÷ (1 + Discount Rate)^t] over the customer relationship

CLV = Average Order Value × Number of Repeat Purchases × Gross Margin × Retention Period

CLV = (Average Order Value × Purchase Frequency × Gross Margin %) × Customer Lifespan

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