An indicator that should be the basis of any marketing strategy: it will tell you the maximum amount that can be spent on attracting a client.
LTV, or Lifetime Value, is an indicator of the total average profit per.
Client that he brings to the company over the entire period. The metric helps to determine the most effective channels for attracting.
To find out how much money can be included in the advertising budget so that the business economics converge.
In marketing instructions
you can find the expression CLTV – Customer Lifetime Value. In fact, this is the same, it’s just that initially LTV was used by services with a subscription fee.
with paying subscribers, and CLTV – business models with buyers, for example, online stores. Now they are increasingly talking about LTV for any Wusiness in general.
How to calculate LTV
There are different formulas for calculating LTV, which differ in the belgium phone number data metrics used and the accuracy of the results
obtained. Periods are used for the calculation – the longer they are, the better. For example, you can calculate LTV for the entire life of a business or a specific sales channel. Or collect data for a year or six months.
The simplest way is to multiply the average number of transactions from one customer by the average check for the same period, and then by the average margin. The problem with this calculation is that the result will not be very accurate. Use it if the store makes a lot of purchases and all the products in the assortment have approximately the same price. Otherwise, it will turn out that one client bought for 100 ₽, another for 10,000 ₽, and the average check is 5050 ₽.
LTV depending on profit
Another formula for which it is easy to collect data, but which does not promise high accuracy. You need to divide the profit for a specific period by the number of clients.
For example, an online store, after deducting all expenses for six months, had a profit of $ 10,000, and the total number of clients who.
Made at least one purchase is 500 accounts. This means that LTV = 10,000 / 500 = 20 $
LTV depending on expenses per client. This calculation method why we lost our growth rate in august requires collecting data that is usually obtained from analytics and CRM systems. But it is more accurate. You can calculate for the entire period or for a specific period.
First, you need to find out the CAC — the cost of attracting a customer. To do this, the budget for marketing channels is divided by the number of attracted customers. You can calculate both the total thailand data budget and the costs for a specific channel. For example, if an online store spends 10,000 ₽ on targeting on Instagram and 200 customers come to the site from there, then CAC = 10,000 ₽ / 200 customers = 50 ₽.