Calculate Customer Lifetime Value – Customer Value Calculator
Customer Lifetime Value (CLV) indicates the financial value of a customer over the entire course of the business relationship.
Calculate—for free and without any hassle—how valuable a new customer is, whether your marketing efforts have paid off, whether customer acquisition is cost-effective, and how much you can spend on marketing.
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Calculate Customer Value for Free
Enter revenue, customer loyalty, contribution margin, acquisition costs, and referred customers. The calculator will show you the simplified gross customer value, the profitability of your marketing campaign, and a more detailed, discounted calculation.
Here's how to calculate customer lifetime value
Customer value is calculated based on revenue, contribution margin, number of years of customer loyalty, number of customers referred, and customer acquisition costs.
Average Revenue Per Customer
The average amount a customer spends per year.
Example: Shoe Retailer. If you acquire a new customer—for example, Mr. Müller—he will spend about CHF 100 on a pair of shoes during his first purchase. If he is satisfied and makes another purchase the following year for CHF 150, his average annual sales will be CHF 125.
Number of Years of Customer Loyalty
Based on experience, your customers may switch providers after an average of four years. In this case, enter 4 for the “Number of Years” field.
Average Contribution Margin in Percent
The contribution margin is the portion of revenue that remains after deducting variable costs.
If you sell a pair of shoes for CHF 100 and the cost price is CHF 40, CHF 60 remains to cover overhead, capital, and risk costs. The contribution margin is therefore 60 percent.
If you offer consulting services or similar services, subtract variable costs—such as wages for a project—from your revenue.
Discount factor
The discount factor shows how much future contribution margins are worth today. The underlying principle is that money today is worth more than money you will receive in the future.
This is also referred to as the cost of capital, which is used to discount future contribution margins from the customer relationship.
If you receive a contribution margin of CHF 60 after one year and use a discount rate of 5 percent, that CHF 60 is worth CHF 57 today.
Customers referred by existing customers
A new customer is doubly valuable: through recurring revenue over several years and through potential referrals.
If one in ten existing customers refers one additional customer each year, enter 0.1 in the corresponding field. If each customer refers one additional customer on average every two years, use 0.5.
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