Customer Lifetime Value
Gross profit per customer. Shows how much the business earns from one customer for the entire customer lifetime.
Calculated by the formula CLTV = (AOV-COGS)×APC-1sCOGS where AOV-COGS is the gross profit of one customer transaction, and APC is the average number of transactions a customer makes. And 1sCOGS is the additional spend to COGS incurred by the business on the very first transaction.
Unit economics & financial modeling in practice
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