Customer Lifetime Value Calculator
Welcome to Rev Marketing’s Customer Lifetime Value Calculator. (CLV, CLTV, LTV) I sincerely hope this tool and the information provided can help guide you in growing your business model at a faster and more sustainable rate. We have multiple calculators and means to monitor and measure CLV for various types of businesses based a variety of factors in which they conduct business.
CLV is the direct means in which to measure amount of money a customer is predicted to spend within your business for the duration of your relationship with that individual. The value of this metric and the way in which you approach it can enhance your business growth immediately.
Earning customer loyalty isn’t as easy as it used to be, or is it? This is far greater than a simple exchange of goods or services for money. CLV is an accurate measurement of how valuable a customer is to your business over a defined period of time. You’ve heard it less expensive to keep your existing customers than it is to find new ones.
Keeping customers happy and loyal is a key asset to keeping CLV at an all-time high within your business model.
I wish you the best as you build your business and work through all of the strategies and tactics needed in this ever-changing world.
Tracy Lee Thomas – Rev Marketing | Founder
How To Compute Your Monthly Recurring Revenue
Let’s take the time and talk about revenue for a moment so you understand a little more about the MRR Formula. Don’t forget to read below about the Churn Rate formula so you enter the correct numbers above.
Revenue
The income your business yields in return for the sales of products and services.
Monthly Recurring Revenue
This is measured in a couple basic methods.
- Monthly Recurring Revenue (MRR) or as …
- Annual Recurring Revenue (ARR)
This is the income you can expect to earn as a recurring source of income on a regular basis within your business model.
MRR Formula:
Average
Revenue Per
Account
X
Total Number
of Accounts
That Month
=
$
Your MRR
MRR Example:
If you have 10 customers and each customer pays $100.00 a month per month, your MRR would be $1,000.00 (one thousand dollars). Enter your MRR in the $ field above.
How To Determine Your Monthly Churn Rate
Great! Now let’s take the time and talk about Churn Rate and its formula below. The churn rate, which is often referred to as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity or more directly, your business. Once you have a understanding of your business please go back to Rev Marketing’s Customer Lifetime Value Calculator and re-enter your figures.
Monthly Churn Rate
Knowing your customer churn rate is a key element to understanding and growing a business. This helps with measuring strengths, weakness, opportunities and threats (SWOT).
Churn Rate Formula:
Customers Who Left
Customers at the beginning of the period (month/year)
+
New Customers gained in the period (month/year)
X 100
for %
%
Your Churn Rate for the period (month/year)
Churn Rate Formula Example:
Customers Who Left
20
100
Customers at the beginning of the period (month/year)
+
30
New Customers gained in the period (month/year)
X 100
for %
15.38%
Your Churn Rate for the period (month/year)
What You Need To Know …
When it comes to a Customer Lifetime Value calculator there are many complicated formulas that work very well for those that understand them and what they are trying to accomplish with the data within their industry and business model.
Rev Marketing wants to take the “simplicity over complexity” approach for you and your business when it comes to the customer lifetime value calculator. Here at Rev Marketing we have multiple methods to calculate this and many times its based on required data needed to grow with an industry. This isn’t a one shoe fits all type of calculation.
As you begin to understand your customer lifetime value and cultivate business strategies and tactics your newly enhanced business model will yield a higher CLV or LTV.
I have placed together 10 tips seen below that will help enhance your CLV.
- Value Driven Upselling and Cross selling pricing strategies (The ladder)
- Scalable pricing tactics
- Service and Product line growth and expansion factors
- Increasing Transactions
- Decrease Churn Rate
- Loyalty Programs
- Enhanced Customer Service
- FREE Customer Upgrades (Add-Ons)
- Become the Problem Solver For Your Clients
- Featured Fans (Clients)
STACKING THE SUCCESS
Business Secrets to Growing Your Business Today Online.
The success of your business online isn’t just about building a quality website platform or marketing campaign it is all about stacking the success in a systematic order for higher profit margins.
It is about how you are telling your story using a secret formula that uses real-world strategies and tactics that work.
- Strategy: Strategic planning is where SUCCESS BEGINS in business and marketing.
- Tactical: Tactical executions allow for a FOCUSED APPROACH to one’s strategy.
- Authority: In a competitive world you must STAND OUT as an authority in your industry.
- Channels: Choosing the RIGHT MARKETING channels in your marketplace to enhance growth.
- Keys: Monitoring and Measuring success with 3 RESULT ORIENTED steps; Solution-Action-Result (SAR).
I would like to take the time to give you The V.I.P. Code right out of my newest book called “Stacking Success” Business Secrets.
Code V.I.P.
- Validate: Cultivating social validation online to BUILD TRUST.
- Impact: Creating a POSITIVE IMPACT by telling YOUR STORY and the CAUSES you support.
- Potential: Creating potentials within a marketplace for FINANCIAL PROFITS.
Let’s Find Your Customer Lifetime Value
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