How to Determine Customer Lifetime Value | Ep. #382

In Episode #382, Eric and Neil discuss how to determine customer lifetime value. Tune in to learn the simplest formula you can use to calculate your customer lifetime value. Eric and Neil also drop several online tools that simplify the process and will do the math for you. Time Stamped Show Notes: 00:27 – Today’s topic: How to Determine Customer Lifetime Value 00:38 – There are multiple ways to determine customer lifetime value 00:52 – Eric shares an example of a SaaS company’s customer lifetime value 00:55 – Neil’s Crazy Egg has a churn of 10%, which is the number of customers who stopped using the product 01:08 – Average price per user ID is $30, so you divide $30 by the churn to get the lifetime value 01:40 – Technically you take the average pay per month 02:00 – Mixpanel can calculate your customer lifetime value 02:10 – RJMetrics can do it for you, too 02:21 – There’s a formula on Kissmetrics that you can copy to calculate the customer lifetime value 02:31 – Eric has tried different formulas and the one on Shopify’s blog is one worth checking out 02:50 – You can do the formula yourself, but there will always be flaws 03:00 – Marketing School is giving away a free 1 year subscription of Crazy Egg which is a visual analytics tool 03:50 – Go to SingleGrain.com/giveaway for multiple entries 03:59 – That’s it for today’s episode! 3 Key Points: There are several ways to calculate customer lifetime value, just find the one that suits you and your needs best. Consider using a tool for a more accurate calculation of lifetime value. You can create and execute the formula yourself, but don’t expect it to be error-free. Leave some feedback: What should we talk about next? Please let us know in the comments below. Did you enjoy this episode? If so, please leave a short review. Connect with us: NeilPatel.com Quick Sprout Growth Everywhere Single Grain Twitter @neilpatel Twitter @ericosiu Learn more about your ad choices. Visit megaphone.fm/adchoices See omnystudio.com/listener for privacy information.