Customers Lifetime Value with Discount Rate Calculator

✖The Contribution Margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.ⓘ Contribution Margin [Cm]			+10% -10%
✖Customer Retention Rate measures the percentage of customers retained in the business out of the total customer base in a given period.ⓘ Customer Retention Rate [CRR]			+10% -10%
✖Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.ⓘ Discount Rate [DR]			+10% -10%

✖Customer Lifetime Value is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship.ⓘ Customers Lifetime Value with Discount Rate [CLV]

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Formula

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Customers Lifetime Value with Discount Rate

Formula

`"CLV" = ("Cm"*"CRR")/(1+"DR"-"CRR")`

Example

`"3.885714"=("8"*"4.25")/(1+"12"-"4.25")`

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Customers Lifetime Value with Discount Rate Solution

STEP 0: Pre-Calculation Summary

Formula Used

Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate)
CLV = (Cm*CRR)/(1+DR-CRR)
This formula uses 4 Variables

Variables Used

Customer Lifetime Value - Customer Lifetime Value is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship.
Contribution Margin - The Contribution Margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs.
Customer Retention Rate - Customer Retention Rate measures the percentage of customers retained in the business out of the total customer base in a given period.
Discount Rate - Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.

STEP 1: Convert Input(s) to Base Unit

Contribution Margin: 8 --> No Conversion Required
Customer Retention Rate: 4.25 --> No Conversion Required
Discount Rate: 12 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

CLV = (Cm*CRR)/(1+DR-CRR) --> (8*4.25)/(1+12-4.25)

Evaluating ... ...

CLV = 3.88571428571429

STEP 3: Convert Result to Output's Unit

3.88571428571429 --> No Conversion Required

FINAL ANSWER

3.88571428571429 ≈ 3.885714 <-- Customer Lifetime Value

(Calculation completed in 00.004 seconds)

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Created by Kashish Arora

Satyawati College (DU), New Delhi

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BMS College of Engineering (BMSCE), Bangalore

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< 8 Sales Metrics Calculators

Customers Lifetime Value with Discount Rate

Go Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate)

Sales Velocity

Go Sales Velocity = (Sales Opportunities Contacted*Deal Value*Sales Win Rate)/Length of Sales Cycle

Customer Lifetime Value

Go Customer Lifetime Value = (Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost

Customer Retention Rate

Go Customer Retention Rate = (Existing Customers-Customers at Beginning)/Customers at Beginning

Sales Pipeline Conversion Rate

Go Sales Pipeline Conversion Rate = Leads to the Next Stage/Sales Opportunities Contacted

Sales Win Rate

Go Sales Win Rate = (Sales Opportunities Won/Sales Opportunities Contacted)*100

Sales Cycle

Go Sales Cycle = Days Spent on Sales Won/Sales Opportunities Contacted

Sales Revenue

Go Sales Revenue = Number of Units Sold*Average Price Per Unit

Customers Lifetime Value with Discount Rate Formula

Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate)
CLV = (Cm*CRR)/(1+DR-CRR)

What is Customers Lifetime Value with Discount Rate?

Customers Lifetime Value with Discount Rate is one of the key stats to track as part of a customer experience program. Customer lifetime value is a measurement of how valuable a customer is to your company, not just on a purchase-by-purchase basis but across entire customer relationships.

How to Calculate Customers Lifetime Value with Discount Rate?

Customers Lifetime Value with Discount Rate calculator uses Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate) to calculate the Customer Lifetime Value, Customers Lifetime Value with Discount Rate is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information. Customer Lifetime Value is denoted by CLV symbol.

How to calculate Customers Lifetime Value with Discount Rate using this online calculator? To use this online calculator for Customers Lifetime Value with Discount Rate, enter Contribution Margin (Cm), Customer Retention Rate (CRR) & Discount Rate (DR) and hit the calculate button. Here is how the Customers Lifetime Value with Discount Rate calculation can be explained with given input values -> 9.04918 = (8*4.25)/(1+12-4.25).

FAQ

What is Customers Lifetime Value with Discount Rate?

Customers Lifetime Value with Discount Rate is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information and is represented as CLV = (Cm*CRR)/(1+DR-CRR) or Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate). The Contribution Margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs, Customer Retention Rate measures the percentage of customers retained in the business out of the total customer base in a given period & Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window.

How to calculate Customers Lifetime Value with Discount Rate?

Customers Lifetime Value with Discount Rate is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information is calculated using Customer Lifetime Value = (Contribution Margin*Customer Retention Rate)/(1+Discount Rate-Customer Retention Rate). To calculate Customers Lifetime Value with Discount Rate, you need Contribution Margin (Cm), Customer Retention Rate (CRR) & Discount Rate (DR). With our tool, you need to enter the respective value for Contribution Margin, Customer Retention Rate & Discount Rate and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

How many ways are there to calculate Customer Lifetime Value?

In this formula, Customer Lifetime Value uses Contribution Margin, Customer Retention Rate & Discount Rate. We can use 1 other way(s) to calculate the same, which is/are as follows -

Customer Lifetime Value = (Average Cost of Customer Value*Average Cost of Customer Lifetime)-Customer Acquisition Cost

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