Customer Lifetime Value Calculator (CLV)

Use the spreadsheet below to determine how much money an average customer is worth to your business. This tool can also help you determine how much you should be spending on marketing for your company and how much money would be appropriate to spend to acquire each new customer.

Instructions – Enter your values in the pale green cells above to calculate your CLV using three different formulas.
The products of those three formulas are then averaged to give you the most accurate estimate of your customer’s CLV. Refer to the legend below for explanations of what those values mean.

Suggestion – It may be more convenient for you to download the spreadsheet to your computer and work on it there. You can do this if you have a relatively recent version of Excel on your computer to open the file with. Click on the small green Excel icon underneath the spreadsheet to download it.

Customer $$ spend per visit – Enter 5 different values that represent the 5 most popular products or services you sell.

Number of visits per week – For customers who purchase from you:

– once a year, enter .02
– twice a year, enter .04
– 4 times a year, enter .08
– 10 times a year, enter .20
– 12 times a year, enter .23 (e.g., monthly rentals, subscriptions, etc.)
– 25 times a year, enter .49

Average Customer Lifespan – The # of years someone remains a customer of your business.

Customer Retention Rate – Over a given period of time, the % of customers who will re-purchase, when compared to an equal, preceding period of time.

Profit Margin per Customer – Your average profit margin (%) per sale.

Discount Rate – Used in discounted cash flow analysis, this is the interest rate used to determine the present value of future cash flows; usually between 8 – 15%.

The “Average Gross Margin per Customer Lifespan” value that is calculated represents your profit margin multiplied by the average customer spend.

The “Average CLV” value represents 2 things – how much a customer is worth to your business in lifetime sales, and a suggested top limit on how much you should spend to acquire a new customer.