KKPI Formulas
Ecommerce KPI Formula

Customer Lifetime Value Formula

Customer lifetime value estimates total value expected from a customer over their relationship.

Use the calculator Browse Ecommerce KPIs
Affiliate resources

Ideas for You

Useful learning resources related to this page. As an Amazon Associate, this site may earn from qualifying purchases at no extra cost to you.

Customer Lifetime Value books Books that help you understand Customer Lifetime Value and related business metrics more deeply. Explore resources → Customer Lifetime Value audiobooks Audiobook searches for learning Customer Lifetime Value while commuting, walking, or working. Explore resources → Ecommerce analytics resources Excel-focused resources for building KPI trackers and dashboard workflows. Explore resources → Marketplace business resources Practical resources for turning Customer Lifetime Value into reports, dashboards, and business decisions. Explore resources →

Simple formula

Average Order Value × Purchase Frequency × Customer Lifespan

The formula uses these inputs:

  • Average Order Value: enter your value in the calculator or spreadsheet.
  • Purchase Frequency: enter your value in the calculator or spreadsheet.
  • Customer Lifespan: enter your value in the calculator or spreadsheet.

Excel formula

Use this Excel formula as a starting point. Replace the sample cell references with the cells in your worksheet.

=B2*C2*D2

Google Sheets formula

In most cases, the Google Sheets version uses the same structure as Excel.

=B2*C2*D2

Power BI DAX measure

Use this DAX pattern as a starting point and rename measures or columns to match your Power BI model.

Customer Lifetime Value =
[Average Order Value] * [Purchase Frequency] * [Customer Lifespan]

SQL example

This generic SQL pattern can be adapted to your warehouse table names and column names.

SELECT
    /* replace with your formula */ AS customer_lifetime_value
FROM kpi_data;

Customer Lifetime Value calculator

Result—

How to interpret Customer Lifetime Value

Use this KPI with trend data, targets, and related metrics. A single value is less useful than a consistent definition tracked over time.

Important: KPI definitions can vary by company, accounting policy, analytics platform, or reporting standard. Keep the definition consistent when comparing periods.

Common mistakes

  • Mixing different time periods in the numerator and denominator.
  • Using totals that do not match the KPI definition used by your company.
  • Comparing results across teams or industries without context.

Related KPI formulas

Frequently asked questions

What is the Customer Lifetime Value formula?

The common Customer Lifetime Value formula is: Average Order Value × Purchase Frequency × Customer Lifespan.

How do you calculate Customer Lifetime Value in Excel?

Use this Excel formula pattern: =B2*C2*D2. Replace the cell references with your own data.

Can this KPI be calculated in Power BI?

Yes. Use the DAX measure on this page as a starting point and adjust table and column names to match your model.