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Customer Lifetime Value (CLV) Calculator

Calculate CLV. Understand how much each customer is worth over time.

Published June 2024Updated June 2024
Calculator
Result
CLV: KES 0
Avg Order ValueKES 0
Annual Purchases1 times
Customer Lifespan1 years
Customer Lifetime ValueKES 0

Each customer is worth KES 0 over their lifetime. Spend up to this amount to acquire them.

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What a customer is worth over time

Customer lifetime value is the average order value multiplied by how often they buy and by how long they stay. It converts a stream of small purchases into a single figure, which is what makes it possible to decide how much a new customer is worth winning.

The version here is the simple revenue form. It does not subtract the cost of serving the customer, so treat it as the top line of the relationship rather than the profit in it.

What it is for

Mainly for setting a ceiling on acquisition. If a customer is worth KES 40,000 over three years and you are spending KES 15,000 to win one, the maths works; if you are spending KES 60,000, growth makes the loss larger rather than smaller.

It also reframes retention. Adding a year to the average relationship often costs far less than winning a replacement customer, and it moves this number by more.

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Worked examples

An average basket of KES 2,500, bought twice a month, over three years
  • Annual value: KES 60,000
  • Lifetime value: KES 180,000
  • Spending KES 15,000 to win that customer leaves plenty of room

Frequently asked questions

How do I calculate customer lifetime value?
Average order value times purchase frequency times how long the customer stays. This gives the revenue form; it does not subtract the cost of serving them, so treat it as the top line of the relationship rather than the profit in it.
How much should I spend acquiring a customer?
Less than they are worth, with room to spare. If a customer is worth KES 40,000 over three years, spending KES 15,000 works and spending KES 60,000 means growth makes the loss larger.
How do I estimate how long a customer stays?
From your own records if you have them: how many of last year’s customers bought again this year. If you do not track that yet, start, because every figure here depends on it.
Is it cheaper to retain a customer than win one?
Almost always, and it moves this number by more. Adding a year to the average relationship usually costs far less than replacing the customer, which is the practical argument for spending on service rather than only on advertising.
Does this work for a business with no repeat custom?
Less well. Where most customers buy once, lifetime value collapses to the average order and the useful question becomes how to create a reason to return at all.

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