Work out the customer lifetime value & how customer satisfaction affects it.

Calculate Customer Lifetime Value (CLV)

Fill in the grey boxes below using estimates from your business.

What is the value of one of your customers?

Average spend per transaction

Average number of transactions
per customer per year

Average lifetime (in years)
of a customer

Average yearly value
of one customer ? = Average spend per transaction x Average transactions per customer per year

Average lifetime value
of one customer ? = Average number of years a customer stays for x Average Yearly Value of one customer

What is the loss to your business from dissatisfied customers?

Average number of complaints per month

Potential complaints per month ? = Average number of complaints you know of per month x 25

96% of dissatisfied customers don't complain. For every 1 complaint you know, there are potentially 25 others that haven't complained.

3,000

Potential complaints
per year ? = Potential complaints per month x 12 months

Potential lost customers
per year ? = Potential complaints per year x 90%

90% of dissatisfied customers don't return.

Potential annual
loss to your business ? = Average Yearly Value of one customer x Potential lost customers per year

Potential lifetime loss to your business ? = Average Yearly Value of one customer x Average Lifetime Value of one customer

Now that you know how much value lost customers cost your business, how about having a go at recovering them?