Customer Lifetime Value
Customer lifetime value (CLTV) is one of the most important metrics to measure at any growing company. By measuring CLTV in relation to cost of customer acquisition (CAC), companies can measure how long it takes to recoup the investment required to earn a new customer -- such as the cost of sales and marketing.
To calculate customer lifetime value you need to calculate average purchase value, and then multiply that number by the average purchase frequency rate to determine customer value. Then, once you calculate average customer lifespan, you can multiply that by customer value to determine customer lifetime value.
Source:
https://blog.hubspot.com/service/how-to-calculate-customer-lifetime-value