Given Data
Campaign Cost = $50,000
Conversions (Customers) = 1,000
Average Order Value (AOV) = $80
Customer Retention Rate = 60% = 0.60
Step 1: Choose a CLV Formula
A commonly used basic CLV formula in Marketing Analytic is:
CLV=AOV
Step 2: Calculate CLV (Per Customer)
CLV=80
CLV=80
CLV=80= 120
Customer Lifetime Value (CLV) = $120 per customer
Step 3: Calculate Total Lifetime Revenue
Total CLV Revenue=CLVNumber of Customers
Total CLV Revenue=1201,000= 120,000
Step 4: Calculate Campaign Profitability
Total Cost:
=50,000
Total Revenue:
=120,000
Net Profit:
Profit=120,00050,000=70,000
Final Evaluation
- CLV is $120
- Total Lifetime Revenue is $120,000
- Campaign Cost is $50,000
- Net Profit is $70,000
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