How to Calculate Customer Lifetime Value | The #1 Most Important Metric for Startups

Fantastic breakdown, Eric! Now I'm thinking about how different acquisition channels impact long-term customer value and how to factor that into our strategy.

Really appreciate how you broke down the CLV calculation; it's much clearer than the formulas I've seen elsewhere! This will be invaluable as I refine my startup's marketing strategy. Thanks, Eric!

Interesting.

It was very instructive

Thank you.

amazing video

I guess the problem is when you sell high ticket products that one customer may buy another unit of your product after two or three years

Thank you so much for this video. Very instructive.

Thank you so much for this video. It was very informative.

Very instructive

Very instructive

Thank you so much for this video. Very instructive.

I have question!
Average Life span time : 4.5 months. Let us say,
- Clients :730
- Churn rate : 22%
M0 : 730
M1 : 160 (730*22%)
M2 : 35 (730*22%*22%)
M3 : 7 (730*22%*22%*22%)
M4 : 1.7 (730*22%*22%*22%*22%)
M5 : 0
Avg life time span 4.5 month means,
the 730 customers would disappear in condition of 22 % churn rate for 5 months in a row?

Thank you so much.

valuable

Hey, Eric! Everton from Brazil :)
I was looking for some content with the deep dive as you provide. Thanks! but, as others comments, I don't got it the logic through de Avg Lifetime 1/%. Until now, it didn't make sende for me. Please, could you explain?

I found you through my digital marketing course. Great video. New subscriber! 🙂

Very great video Eric! Thank you so much :)

How can I calculate the churn if a customer is paying a flat fee for my service and, depending on the service, they could be an active customer for 2+ years?

Thanks Eric, walking through it month by month helped me see my mistakes!

Hi ,
Don't we consider new customer as we churn customer from last month & new customer will also be adding upto.

This video is so helpful, really appreciate your content Eric. But i wonder that how you can figure out spending 50$ more to gain new customers.

Great video man. But this isn't suitable for a brand new ecom start up? Since how can we predict all the churn rates etc. We need to have some sales first prior to applying this if im correct?

Great video, Eric! Thanks for the crisp walk through.

Thanks for sharing. hand down for this!!. such a informative and practical CLV video.

very well explained.

Hi, Is the number of customers the total for one month or the total number of customers from the beginning until now?

Hi Eric, I am confused in LTV and CLTV . as I checked another articles in internet : LTV = LTV = Customer value * Average customer lifespan in this Cost is not included. And CLTV is LTV*Profit Margin .
Can you please clear my doubt. Thanks

Hi Eric, Very helpful. How to calculate LTV for goods instead subscription, all customer will buy any products like Shirts, Pants and Shoes?

Does subscriber lifetime value and customer lifetime value same?

THANK YOU!! Such a good breakdown! I'm in a marketing undergraduate program right now, and the way it was written out in the textbook looked like a hieroglyphics.

Can I use this formula for my coffee business? And can u rcmd me a helpful tool for tracking CLTV?

Very good

Hi Eric, thank you for the fantastic explanation. Thanks to you I'm almost ready to launch my startup business! :)

Very nice presentation!

How do we forecast CLTV if we dont have any sales

Will this be applicable for print on demand product?

Hi eric I am watching the video, it is soo good I just have a question.. If I need to get a conclusion about the Break-even point in this example you provided... what would be the numbers I have to use? I hope you read me. Thanks in advance

Absolute gold! Thank you Eric!

Thanks for simplifying the computation. Some teachers use a difficult formula like an art form.

Hi @eric It would be great if you can just share the excel sheet on chat or email, it would be extremely helpful. And great content. It helped a lot. 👍

I would say user based customers, not only subscription business model. You can also use it for advertisement base or transaction based user companies.

Thanks a lot dude

Hi Eric, thanks for this. and i have a question -
If there is no churn in a particular month, then how do we calculate LTV?
thanks in advance

Good video. I'm curious how do we arrive at the formula of Lifetime months = inverse of churn. What is the logical/mathematical explanation of the formula?

Do you know of a chart that shows an estimate of each type of businesses CLV? It would be very useful to be able to quickly refer to when selling advertising.

Thank you !
If CLV needs historical data then any new company can not calculate or anticipate the customer lifetime value except after a few months, so CLV is not applicable to new businesses?