How to Calculate Customer Lifetime Value - Video Lesson

A short video lesson on how to calculate customer lifetime value.

by Ben Murray
CFO passionate about financial visibility, SaaS Metrics, and SaaS economics.Follow 378

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Description
Customer Lifetime Value (LTV) is an important concept in SaaS business. Learn how to calculate this important SaaS metric, learn how to apply it to your business, and learn troubleshooting tips when implementing this metric.

The Excel LTV template can be downloaded at this link->>https://www.eloquens.com/tool/EJqcZG/startups/lifetime-value-ltv-models-and-methods/customer-lifetime-value-excel-template

Customer Lifetime Value (CLTV) is the revenue or margin that you receive from one 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 video and post above, I explain how to calculate Customer Lifetime Value (CLTV) in SaaS and how to correctly apply it. In my free Excel download, I walk you through basic customer lifetime value formula to the advanced and provide examples for each scenario.

Depending on how you calculate CLTV, it can mean many things. What does LTV really mean? To me, this formula produces the lifetime margin (factors in ACS) of one customer after discounting for the time value of money (WACC) and churn but offset by customer subscription growth. Pretty wordy, I know. Think business valuations. You are valuing the cash flows produced by one customer.

Hope you enjoy the video.

- Ben Murray

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