Let's break down each metric in detail:
1. Running Customer Lifetime Value (CLTV):
This metric calculates the average revenue a business has earned from each customer over their entire lifetime to date. It reflects the total value generated by customers up to the current moment or month in context.
Formula:
CLTV = Total Revenue from Customers / Total Number of Customers
2. Running Customer Lifetime Period (CLTP):
CLTP measures the average time (in months) that customers have been purchasing from the business. It shows how long customers have been active up to now.
Formula:
CLTP = Sum of Customer Lifetimes in Months / Total Number of Customers
These metrics are used to analyze how much value customers have historically contributed to the business.
CLTV and Customer Lifetime Periods
By automatically calculating these metrics with Core Financiero by Air-Metrics, you’ll gain insights into the profitability, efficiency, and payback timeline of your customer acquisition efforts.
CLTV and Customer Lifetime Periods
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