Customer lifetime value

What is customer lifetime value? Customer lifetime value is how much money a business generates from each customer throughout the time period that a person remains a customer of that business.

For example. Let’s say a customer spends $197 a month with you and the average customer stays with your business for 5 years, then your customer lifetime value is $197 * 60 = $11,820.00 per 5 years. Or $11,820 / 5 = $2,364.00 per year.