How to Determine Customer Lifetime Value | Ep. #382

<p>In Episode #382, Eric and Neil discuss how to determine customer lifetime value. Tune in to learn the simplest formula you can use to calculate your customer lifetime value. Eric and Neil also drop several online tools that simplify the process and will do the math for you.</p> <h3>Time Stamped Show Notes:</h3> <ul> <li>00:27 – Today’s topic: <em>How to Determine Customer Lifetime Value</em></li> <li>00:38 – There are multiple ways to determine customer lifetime value</li> <li>00:52 – Eric shares an example of a SaaS company’s customer lifetime value <ul> <li>00:55 – Neil’s Crazy Egg has a churn of 10%, which is the number of customers who stopped using the product</li> <li>01:08 – Average price per user ID is $30, so you divide $30 by the churn to get the lifetime value</li> <li>01:40 – Technically you take the average pay per month</li> </ul> </li> <li>02:00 – <a href="https://mixpanel.com">Mixpanel</a> can calculate your customer lifetime value</li> <li>02:10 – <a href="https://rjmetrics.com">RJMetrics</a> can do it for you, too</li> <li>02:21 – There’s a formula on <a href= "https://blog.kissmetrics.com/how-to-calculate-lifetime-value/">Kissmetrics</a> that you can copy to calculate the customer lifetime value</li> <li>02:31 – Eric has tried different formulas and the one on <a href= "https://www.shopify.com/blog/customer-lifetime-value">Shopify’s blog</a> is one worth checking out</li> <li>02:50 – You can do the formula yourself, but there will always be flaws</li> <li>03:00 – <a href="http://marketingschool.io/">Marketing School</a> is giving away a free 1 year subscription of <a href= "https://www.crazyegg.com/">Crazy Egg</a> which is a visual analytics tool <ul> <li>03:50 – Go to <a href= "http://singlegrain.com/giveaway">SingleGrain.com/giveaway</a> for multiple entries</li> </ul> </li> <li>03:59 – That’s it for today’s episode!</li> </ul> <h3>3 Key Points:</h3> <ol> <li>There are several ways to calculate customer lifetime value, just find the one that suits you and your needs best.</li> <li>Consider