How to Calculate the Lifetime Value of a Client

How to Calculate the Lifetime Value of a Client

The lifetime value of a client is when you figure out the total financial value that one client has for you over their lifetime.

For example, if you make $3,000 per client, and that client transacts with you every 5 years, the lifetime value of that client would be $12,000 over a 20-year time period.

$3,000 times four transactions over a 20-year period equals $12,000.

If each of your clients also sends you just one referral over that 20-year time period, the lifetime value doubles to $24,000.

So, instead of looking at the client as only being worth $3,000 to you, you could look at it where each client is actually worth $24,000 to you.

If you have a database of 100 loyal clients, your community of 100 clients is literally worth $2.4 million over a 20-year time period.

So here's my ridiculous question of the day:

What's the lifetime value of your clients, and what are you doing right now to unlock that value?