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# LCV Calculator

The measure of the profit that you gain from a customer in a business is termed as the customer life time value (CLV). It can also be termed as life time value (LTV) and life time customer value (LCV). This metric is used to evaluate the financial value of a customer. This LCV calculator helps you to estimate your CLV.

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The measure of the profit that you gain from a customer in a business is termed as the customer life time value (CLV). It can also be termed as life time value (LTV) and life time customer value (LCV). This metric is used to evaluate the financial value of a customer. This LCV calculator helps you to estimate your CLV.

#### Formula:

c = m* ((r/100) / (1+(d/100) - (r/100))) Where, c = Customer Lifetime Value m = Gross Margin r = Monthly Retention Rate d = Monthly Discount Rate

In other words, it can be termed as the life time value of a customer relationship. The LCV (Customer Life time value) model has three arguments to be considered which includes margin, retention rate and discount rate. Calculating CLV varies for simple and complex models.

#### Example

The Life time customer value (CLV) for a business with gross margin 1000 \$ , retention rate of 5 % and discount rate of 3 % is

= 1000 * {(5 / 100) / [(1+(2/100)) - (5 /100)]}
= 51.02 \$
Therefore, the CLV value is 51.02 \$