Customer Lifetime Value & Key Metrics Calculator - Experience Investigators

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Customer Lifetime Value & Key Metrics Calculator

Customer Lifetime Value Calculator

1

2Part 1: Enter Initial Numbers

3Part 2: Reveal Key Metrics

4Part 3: Measure Your Potential

Welcome to Experience Investigators' Key Metrics Calculator
How does it work?
- 1
  
  We'll ask you for four numbers:
  1. Customers per year
  2. Purchases per year
  3. Customers lost per year
  4. Total annual revenue.
- 2
  
  Using only those numbers, we'll calculate and report back to you six key metrics, including Customer Lifetime Value (CLV).
  
  Each of these numbers is critical to your bottom line -- and can be improved through customer experience.
- 3
  
  Finally, use our interactive tool to see how small improvements to key metrics can make big changes to your Customer Lifetime Value and Annual Revenue.
Everything entered into this calculator is confidential, and won't be shared with Experience Investigators. So have fun testing different combinations of numbers. Ready to go?

Part 1: Enter Initial Numbers
Enter these four numbers and our calculator will do the rest. If you don't know any of these numbers exactly, that's okay! Just make your best guess, or do nothing to leave in our default figures. Hover over the icon to learn more about each number.
Number of Customers Per Year*
How many unique customers does your organization have in an average year?

Count each customer once, whether they're a one-time customer or make multiple purchases.
Number of Customers LOST Per Year*
How many customers do you lose in an average year?

We consider a lost customer as someone who has bought from you at least once and has no intention of buying from you again.
Number of Purchases Per Year*
How many total purchases are made by all customers in an average year?

Include all purchases, even multiple purchases made by the same customer.
Revenue Per Year*
How much "top line" revenue does your organization gain in an average year from customer purchases?

Part 2: Reveal Key Metrics
Based on the numbers input in section 1, these are your results in six key metrics.

Why do we focus on these metrics? They're all numbers that are directly tied to your company's bottom line -- and can be improved by delivering better customer experience. Hover over the icon for any item to learn more.
- Churn Rate
  Percent
  Your churn rate is the number of customers you lose in a given time compared to your total number of customers.
  
  We calculate this by dividing lost customers by unique customers.
  
  Customer experience can create customers who are more loyal and stay with brands longer, reducing lost customers and churn rate.
- Average Purchase Frequency
  Purchases Per Year
  This is the number of purchases a customer makes on average in a year.
  
  We calculate it by dividing your total number of annual purchases by your number of unique customers in a year.
  
  Customer experience can lead to more engaged customers and higher purchase frequency.
- Customer Average Purchase Value
  Per Purchase
  This is the value of an average purchase, regardless of whether made by a new or returning customer.
  
  We calculate this by dividing total revenue by number of purchases.
  
  Customer experience leads to more engaged customers and creates easier upsell and cross-sell opportunities. Great CX also leads to a greater number of referral customers, and research shows that referred customers spend more than the average customer.
- Customer Average Lifespan
  Years
  This is a measurement of how many years an average customer stays a customer.
  
  We calculate this by dividing one by your churn rate.
  
  Customer experience contributes to longer customer relationships, and ultimately more opportunities for customers to buy from you. Selling to existing customers almost always take less of a time and financial investment, so increasing customer lifespan is key to easy, scalable revenue growth.
- Customer Average Annual Value
  Per Year
  This is what an average customer is worth to you in a single year.
  
  We calculate this by multiplying average purchase value by customer lifespan.
  
  Customer experience can increase annual value of a customer by creating customers who are more trusting, engaged, and loyal to your brand.
- Your Customer Lifetime Value (CLV)
  Over the Customer Lifetime
  This metric measures the value of a customer over the lifetime of their relationship with your organization!
  
  We calculate this by multiplying a customer's average value by their average customer lifespan.
  
  Customers take a lot of effort and investment to secure -- from your marketing team to sales to onboarding. When the value of each customer increases, your organization's return on those investments is greater.

Part 3: Measure Your Potential
Click on the toggles below to see how minor improvements can make a big difference in your bottom line.
- Current Numbers
- Customer Lifetime Value (CLV)
- Annual Revenue
- If Churn Rate decreased by...
  - 1%
  - 2.5%
  - 5%
  Great customer experience increases Customer Loyalty, increasing Customer Average Lifespan, reducing Customers Lost Per Year, and ultimately decreasing Churn Rate in the process.
- If Number of Customers increased by...
  - .5%
  - 1%
  - 2%
  Great customer experience increases referrals.
- If Avg Purchase Value increased by...
  - .5%
  - 1%
  - 2%
  Great customer experience increases referrals. Data shows that referred customers spend more than the average customer.
- If Avg Purchase Frequency increased by...
  - .5%
  - 1%
  - 2%
  Customer experience can lead to more engaged customers and higher purchase frequency.
- Potential Numbers
- Customer Lifetime Value (CLV)
- Annual Revenue
Why Did We Choose These Metrics?

All these numbers can be improved through intentional customer experience. Customer experience done well can:
- Increase Customer Loyalty, increasing Customer Average Lifespan, reducing Customers Lost Per Year, and decreasing Churn Rate in the process.
- Increase referral rates, leading to more customers per year.
- Increase Average Purchase value -- data shows that referred customers spend more than the average customer.
- Increase Purchase Frequency -- Customer experience can lead to more engaged customers and higher purchase frequency.

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