So you managed to get that customer to buy from you! You made the sale… and is that all? Not at all; it is an error to consider that a customer is only worth the profit you get from that one sale. Have you considered this customer could be repeated and then buying again from you? Yeah!
In fact, the type of customers we like are those that buy (and pay), and repeatedly in time will be buying again and again. However, no love story has been forever, and your customer will end up buying elsewhere (at least, the average customer will do); do not take it personal, but there are many reasons that this will happen, and marketers should know at which rate your business loses customers (i.e. Fidelity, retention).
If you consider this cycle, you are capable of calculating the average profit per customer _which includes the fixed initial acquisition cost (how much have you spent to gain that customer)_ and estimate the average customer life (as your customer), then you should be able to calculate how much a customer is worth to your business: the customer lifetime value (CLV).
This app will allow you to calculate CLV the simpler way; when the sales cycle is not too complicated you can approximate the CLV calculation by using the 'turnover', 'number of customers', and 'churn rate' (% of customers that stop buying from you every month).
Added new advanced calculation