An easy example of customer lifetime value

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Let's try to contextualize with an example: we deal with marketing and sales for a small chain of grocery stores and we want to measure the performance of the last 5 years. Based on the data contained in the ERP system, we trace:

the average amount that the typical customer spends each time he or she shops in one of the stores (35 euros);
the average frequency of his visits (once a week: 52 times a year);
within a relationship that has lasted 5 years.
To calculate our customer lifetime value we will have to multiply these afghanistan whatsapp resource three numbers (35 x 52 x 5) and we will get a total value of 9100 euros. In summary: to calculate the customer lifetime value , we multiplied the average revenue or profits for each visit by the number of visits per year, and then multiplied the result of this first operation by the average number of years of the relationship with the customer. The formula to apply is the following:

CLV = Average Transaction Value x Number of Transactions x Relationship Time Period

Three Great Reasons to Calculate Customer Lifetime Value
Companies that choose to calculate their customer lifetime value , like the small grocery chain in our example, do so for three excellent reasons.