For the average retention years of customers, he calculated that his customers usually return at least 5 times in the next few years, which means they will continue to remain as customers for 5 years. Sergio takes these numbers (1 order per year, 250 Euro profit per customer, 5 consecutive years of ordering) and plugs them into the formula. This is what it looks like after inserting Sergej’s information: (1) x (250) x (5) = 1250 CLV Now that Sergio knows that his CLV is 1250, he can try to improve it by retaining existing customers for a longer period of time, or use it to help him locate and convert valuable potential customers.
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