How to calculate the lifetime value of a client

You need to work out the lifetime value of your customers. What each customer is worth to you. This is a really important number because when you look at your advertising spend you can work out how much you can spend in order to get a new client because you know what each new client is worth to you. You work this out by looking how much they pay you. Each transaction, or monthly or yearly however that works for you and then how long they stay with you on average and then you can calculate what the lifetime value is… You might have more than one CLV if your services are totally different and that’s ok. The important part is knowing what each of these are before acquiring new customers.

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