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Forming Table Styles fort Aignment Numb Average annual profit per customer = Annual Revenue - (Product Cost +Service Cost) C 0 G H Numerical Calculation of Customer Lifetime Value Please follow the steps to calculate CLV Initial assumptions are as follows: M N Annual revenue per average customer (per annum) Product costs associated with the average customer's purchases (per year) Customer Service Expenditure (per year per customer) Annual retention rate (loyalty rate) Average costs to acquire a new customer $2.000 $500 $100 80% $1,000 Step 1: To calculate the average annual profit per customer Average annual profit per customer = Annual Revenue - (Product Cost +Service Cost) Step 2: To calculate the customer lifetime in years from the retention rate Customer lifetime in years= 100%/100% - Annual Retention Rate 1/1 Annual Retention Rate) Step 3: To calculate Customer Lifetime Value, CLV CLV profit X years-accuisition