source- Scott Davisat: https://www.youtube.com/watch?v=GPSysUOV240

there are many ways to calculate customer lifetime value (CLV), this exercise uses a spreadsheet to perform the calculations for you. Follow the Customer Lifetime Value link under the Procedure heading to open a spreadsheet. (You will need Microsoft Excel to open the file.) Enter the numbers in the example below to find a result for customer lifetime value. Then record the answer in your journal following the procedure below.

For example:

A Rogers cable customer costs $450 to acquire and generates a yearly profit of $1,450. The retention rate is 60% but the average lifetime of a customer is 10 years. Calculate the Customer Lifetime Value (CLV) using a 15% discount Rate.

Procedure

Use theCustomer Lifetime Valuespreadsheet to perform your calculations. All you have to do is plug in the numbers from the example above. When finished, input your vales in the table below:

Yearly Profit ?

Retention Rate ?

Discount Rate ?

Acquisition Cost ?

Lifetime in Years ?

Customer Lifetime Value ?