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Calculating CLV is straightforward. You multiply the average revenue you expect from a customer by the number of years they typically stay with you. For example, if a customer spends about $1,000 annually and usually sticks around five years, their CLV would be $5,000.
How Is LTV Calculated? Loan-to-value (LTV) is calculated simply by taking the loan amount and dividing it by the value of the asset or collateral being borrowed against. In the case of a mortgage, this would be the mortgage amount divided by the propertys value.
Customer service is the support you offer your customers, from the moment they first contact your business to the months and years afterward. Providing good customer service means being a reliable partner to your customers, going beyond helping them troubleshoot, use, and make informed decisions about your product.
The formula for calculating CLV at an individual level is the same, although slightly easier to calculate you simply multiply how much that customer spends each year (so no averages for purchase frequency or spend required) multiplied by the number of years you can reasonably expect them to stay with you.
The formula for calculating the lifetime value of a customer is often given as (Average Purchase Value) (Number of Transactions) (Customer Retention Period), but a more refined option, (Gross Margin) (Average Customer Lifespan), better reflects the overall profitability from a customer.

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Textbook Expert-Verified. The formula for calculating the lifetime value of a customer is often given as (Average Purchase Value) (Number of Transactions) (Customer Retention Period), but a more refined option, (Gross Margin) (Average Customer Lifespan), better reflects the overall profitability from a customer

800183 cvs module