This is so great, but I have a question. What about high ticket industries? I have a client who does high end interior design, how do you calculate the life time value if they usually only purchase once?
Great content.. but how do we predict how many times would a customer return ? How much would he spend and for how loong ? And how do we track the customers activity ? Kindly pls clarify. Once again thanks.
I love this! I’m starting to market to hair/extension companies. Doing the calculations with conservative numbers they should be paying me no less than $12,000 a month for lead generation. I really needed to see this🤗🌺
Dear Friends, I have a question: 1/ in the CLV, the life of a customer is an estimate of the time between a customer's first purchase date and a customer's last purchase date, right?. Thank you.
In your example, year 1 had an acquisition cost but year two there is no acquisition cost. The margin for year 1, year 2, and the total lifetime margin are three different numbers.
hi there as a pet sitter would I use each client visit or each service meaning would I use each visit during a week long vacation or just use the entire vacation service coverage as one service. Even if the client had 14 visits in a week? I bundle many visits for clients pets within one service invoice. Also When I do dog walking I bundle all the months dog walks for a client under one invoice but it may be 10-20 visits a month total. Just curious is I should use total number of visits or each invoice as a service per listed above?
Hi Tonia, Your concern is related to "Unit Economics", please check for this term online. Im sorry i cant clarify here as it would require too much typing. But its not a complicated topic thou. Hope it helps. Wish you all the best !!
That's cool. But we missed the point that future cash flows must be converted into their net present values. What if a customer's average retention rate is more than 10 years? We can't simply calculate the CLV using this formula. We need to calculate the NPV's of future cash flows.
Nicole Lyons well actually it’s also how many years they will do it. For instance people will continue to work the same company if they are great at what they do. $10x50 times a year =$500 then multiply that by how many years they will stay with you $500 times 5 years equals $2500. So one customer is worth $2500. so if I am a social media manager and I get you an average of 5 customers per month that’s 5 customers times 12 months in a year. That’s 60 customers. But those 60 customers could potentially spend $150,000 dollars with you over the next 5 years. This is why my clients don’t mind paying me $1000-$4000 a month as a social media manager who does Facebook Lead Generation ads.
