This metric is also praised because it can demonstrate the level of customer satisfaction with the company, since if they have good experiences, they tend to stay for a long time. However, if the experiences are not pleasant, the relationship may be broken.
To calculate Lifetime Value, or LTV, you will need two other equally important metrics: average ticket and customer retention time. If you don’t know them yet, don’t worry! We’ll show you what they represent below:
Average ticket
The average ticket is kuwait email list the amount your customers spend per order. To calculate it, simply divide the total amount invoiced by the number of orders made during the analysis period.
Customer dwell time
Dwell time is the average period of time customers spend shopping at a company. The more satisfied they are, the more repeat purchases they make.
This length of stay is also used in another important indicator, the abandonment rate, which we will see below.
Customer churn rate
The customer abandonment rate, also known as Churn Rate, is related to the average time that consumers remain with the brand, from the previous topic.
To calculate this, you simply need to know the number of active consumers, who buy regularly, and those who no longer buy. With this information, divide the number of absent customers by the total number of active customers, multiplying by 100 at the end and finding the result as a percentage.
Lifetime Value
Now that you afb directory know the other he does everything necessary to ensure that customers metrics you need, let’s get back to our focus: calculating LTV. To do this, simply multiply the average ticket calculated by the average length of time customers stay.
Let’s use an example to make it clear. Imagine a company that has an average monthly revenue of R$250.00. It conducted a study and discovered that its customers continue to purchase for an average of 6 months. Therefore, the Lifetime Value is R$1,500.00.