The formulas used in the calculations are:
\[ \text{average purchase value} = \frac{\text{total revenue}}{\text{number of purchases}} \]
\[ \text{average purchase frequency} = \frac{\text{number of purchases}}{\text{number of customers}} \]
\[ \text{average customer value} = \text{average purchase value} \times \text{average purchase frequency} \]
\[ \text{average customer lifespan} = \frac{\text{sum of customer lifespans}}{\text{number of customers}} \]
\[ \text{CLTV} = \text{average customer value} \times \text{average customer lifespan} \]
This calculator computes the Customer Lifetime Value (CLTV) based on the input values of total revenue, number of purchases, number of customers, and sum of customer lifespans.
Let's assume the following:
Calculate the average purchase value:
\[ \text{average purchase value} = \frac{5,000,000}{500,000} = 10 \]
Calculate the average purchase frequency:
\[ \text{average purchase frequency} = \frac{500,000}{200,000} = 2.5 \]
Calculate the average customer value:
\[ \text{average customer value} = 10 \times 2.5 = 25 \]
Calculate the average customer lifespan:
\[ \text{average customer lifespan} = \frac{300,000}{200,000} = 1.5 \text{ years} \]
Calculate the CLTV:
\[ \text{CLTV} = 25 \times 1.5 = 37.5 \]
Therefore, the Customer Lifetime Value (CLTV) is $37.5.
