Customer lifetime value is the amount of revenue that you can expect from a customer over the period that your service will be provided to them. So, this metric is clearly dependent on how long a customer will use your service and how much they’d be paying you. 

Be it a consumer product or a service-based product, the essence of CLTV is similar to each of them.

And for a healthy business, this is one of the metrics you should be tracking. So, let’s see how we calculate this.How Do You Calculate Customer Lifetime Value?

Well, there are different ways as to how SaaS companies measure this metric. One of the easiest ways is simply calculating the average customer value (considering all your customers) & in-turn their lifespan. 

CLTV = Average customer value / Average customer lifespan

Be it a consumer product or a service-based product, the essence of CLTV is similar to each of them.

Learn more about high LTV customers in Targeting High LTV Users.