How to Use the Customer Lifetime Value (CLV) Calculator
You only need to enter four numbers – please only type over the numbers in the white cells – the numbers in the orange cells are automatically calculated for you.
To calculate the customer lifetime value, you will need to enter:
- Average customer acquisition costs
- Average customer profit contribution per year
- Average annual customer retention rate
- An appropriate discount rate (normally in the range of 10%-20%)
In the spreadsheet calculation, the customer retention rate is used as an estimate of the probability of receiving future customer cash flows (that is, revenues and costs).