CUSTOMER LIFETIME VALUE (CLV)

How much do you expect to earn per customer?

Our next sales KPI example refers to your customer lifetime value (CLV) which is important to track because the longer you keep having paying customers, the more you’ll make. To calculate this sales metric, you need to distract your CAC from the total amount of revenue which you expect to get from a new customer over the lifetime of the relationship. If your ARPU and CLV are rising, it signals that on average you are getting more revenue from each customer, for longer and that’s exactly what you should be aiming for. CLV enables you to understand how much you can allow for your CAC to still be profitable; a healthy ratio is key.

Performance Indicators

As long as customer lifetime value and average revenue per unit are growing, you’re in the green and your CAC are appropriate.

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About The Author

Anthony Crilly

Anthony Crilly is a Business Sales Expert with decades of successful experience in selling and customer engagement. Anthony specializes in business-to-business go-to-market strategies for technologies and regularly attends training session s to showcase his evolving tech trends, such as self-service, health and wellness, and people analytics tools. A strong believer in the power of positive thinking in the workplace. Anthony regularly develops internal wellness and unique value propositions campaigns to assist businesses with effective physical and mental health techniques as well as business acquisition and growth techniques. Anthony enjoys a good run, bike, swim tri-athletic performance as well as a Netflix binge but can also be found on long runs and bike rides on hilly country roads in the Adirondacks or on Conesus Lake.

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