Customer Life Time Value | CLTV calculator
Originally published: 30/11/2020 09:17
Publication number: ELQ-33431-1
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Customer Life Time Value | CLTV calculator

Calculate lifetime value of a customer

Description
Customer Lifetime Value (CLTV) is an important aspect of any SaaS business. This model will help you understand the concept, its definition, and its calculations. Model will help you calculate CLTV based on your inputs.

You can download the model for free from Eloquens.

Customer Lifetime Value (CLTV) is the revenue or absolute margin that you receive from an individual customer over the lifetime of that customer. The term “Customer Lifetime Value” is known by many words. It’s also known as Lifetime Value (LTV) or CLTV.

In this model, I have tried to keep things simple with only necessary inputs. Of course, based on the different offering for your SaaS business you will have to calculate customer lifetime value for each offering.

Furthermore, Customer Lifetime Value may differ based on your assumptions. And you can never be sure about your assumptions. Hence, to complement your 'base case' assumptions, I have added scenario analysis in my model. Scenario Analysis will help you understand the impact of 'better than expected' or 'worse than expected' scenario for you assumptions.

HOW TO USE THIS MODEL
1. Index: Use index to move around the model
2. Definition: Understand the important definitions here. Also refer to guidance around industry specific assumptions
3. Input: Enter your assumptions in Yellow cells and refer to final CLTV value

Hope you enjoy this model.

- AZ Finserv

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  • Naveed Khaliq(last updated: 09/05/2021 20:38)

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