Calculating Customer Lifetime Value is only the beginning

twosided helps you build better marketplace businesses. Explore 50+ other metrics that help you grow.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
One e-mail per month, absolutely free.

Free Customer Lifetime Value Calculator

What's Customer Lifetime Value, and how do you calculate it?

Customer Lifetime Value (CLTV) is a metric that measures the predicted revenue that a customer will generate for an online marketplace platform over the course of their relationship. It is a valuable metric because it can help marketplace operators understand the long-term value of their customers and inform strategies for customer acquisition, retention, and relationship management.

To calculate CLTV, you need to multiply the average revenue per customer by the average customer lifespan. The average revenue per customer can be calculated by dividing the total revenue generated by the marketplace platform by the total number of customers. The average customer lifespan can be estimated based on historical data on customer behavior, such as purchase frequency and churn rate.

CLTV can be used to identify high-value customers and prioritize efforts to retain them. It can also inform strategies for acquiring new customers by identifying the types of customers that are likely to generate the highest CLTV.

To increase CLTV, online marketplaces can implement strategies to improve customer retention, such as providing excellent customer service, offering loyalty programs, and providing personalized recommendations and promotions. They can also use data and analytics to optimize the customer experience and increase customer engagement and satisfaction.

By monitoring CLTV, online marketplaces can gain insights into the long-term value of their customers and make data-driven decisions to optimize their business strategies and achieve their goals.

Dive deeper into more related metrics