Customer lifetime value

customer_lifetime_value

Description: The average Gross profit from a group of New customers over a set number of months after their first order. The shop picks the number of months. It counts all their orders, not only the first.
When to use: Use it to decide how much you can pay to win a customer. Set it next to Cost per new customer. To see how many come back for a second order, use Repeat purchase rate. Leave out a recent group until it has had the full number of months.
Formula: Gross profit from all orders of a group of New customers within the chosen months. Divide it by the number of customers in that group.

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