Performance Marketing: How to Calculate Customer Value

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In performance marketing, calculating the lifetime value of a customer allows you to make a better forecast of future revenue and makes it easier to identify those processes that generate the greatest value for your company.


1. Average purchase value indicator
This indicator provides the average value of each purchase, in relation to a specific period. It is calculated as follows:

Total income for a period/total purchases in the same period.

You can consider data from 1 year, 6, 3 or 1 month, this will depend on how often you need to measure your strategy.

2. Purchase frequency indicator
This indicator provides the average purchase frequency of a customer in a specific period. It is calculated as follows:

Total number of purchases in a period/total unique customers for the same period.

3. Customer rating indicator
By measuring this indicator you will know the average value of income that croatia mobile phone number list a client brings in. It is calculated through the following multiplication:

Average purchase value indicator x Purchase frequency indicator.

4. Customer lifetime indicator
With this parameter we will obtain the average value related to the time that a customer remains active, that is, how long on average they spend making purchases in our business. Its calculation is cleared as follows:

Average number of customer purchases in a period/total number of customers in the same period.

5. Customer lifetime value indicator
Finally, to calculate the LTV, we have to perform the following operation:

Customer rating indicator x Customer lifetime indicator.

This last metric itself shows the average revenue generated by each customer over the course of the business relationship. This is something that marketing and sales teams need to think about in order to plan and execute their strategies. The longer and more frequently a customer purchases, the higher their lifetime value will be for a company.

Monitoring these indicators is key to improving our digital marketing strategies , allowing us to make a very valuable revenue projection. In this way, an evaluation of the different marketing actions and campaigns to be carried out can be carried out. We have to make sure that the customer returns and buys , but above all that they return frequently.