How do you calculate customer lifetime value?

There are many formulas available to calculate lifetime value. However, calculating predictive customer lifetime value at the individual level requires a complex model. The steps include:

  • Locate the necessary data
  • Forecast every existing customer’s behavior
  • Split the data into two sets for training and testing
  • Add customer features and attributes to the model
  • Train and validate the model
  • Put the model into production

Read our whitepaper to learn 8 steps to calculate CLV.

Check out this blog post to learn how to make three types of CLV models: analytic aggregate CLV, analytic cohort-based CLV, predictive CLV using statistical models.