Aureum calculates Customer Lifetime Value (CLV) using the following formula
CLV = Avg. Revenue per Invoice * Avg. Number of Invoices per Customer
Aureum is able to calulate CLV after importing invoices from an accounting platforms and payment processing platforms. Aureum also treating CLV as a rolling metric meaning it does isolate the calculation to a specific time range, but instead all data points at or before a given point in time.
For example, to calculate CLV this month:
- Total Invoices on or before the end of this month
- Total Customers with an invoice on or before the end of this month
- Total Amount Invoiced from the Total Invoices collected previously
Next:
- Avg. Invoice Frequency = Total Invoices / Total Customers
- Avg. Invoice Value = Total Amount Invoiced / Total Invoices
- CLV = Avg. Invoice Value * Avg. Invoice Frequency