Customer Value Analytics

Bright01
Bright01 used Ask the Experts™
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I have searched the EE Database and cannot find what I'm looking for.  I am searching for an Excel spreadsheet or formulas that calculate several different Customer Value KPIs.  

Customer Life-TIme-Value
Customer Churn rate
Customer Defection or Retention

If you have any ideas on either formulas or samples; it would be much appreciated.

Thank you in advance,

B.
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Author

Commented:
Aiklamha,

Thank you for the quick response.  I have the definition for CLV; what I was looking for is someone who either knows how to or has already put into an Excel spreadsheet the mathmatical formula.  I would do it myself but math wasn't one of my strong points in College.

Thanks,

B.

Author

Commented:
Aiklamha,

Does that mean that creating LTV is simply a function of NPV for cash flow or does the equation expressed in the article you sent me hint at more?

B.

Author

Commented:
Here is a sample based on the article.  What is not clear to me is the math formula for calculating LTV.  How does "churn" rate come into play?  Any improvements you can make to this?

Thank you,

B.
Calculation-for-LTV-Sample.xlsm
There are several models to calculate LTV over a period of time ... the basic difference is the amount of assumption they make... for example a simpler model can assume higher customer loyalty that means less or no customer churn rate...

A model with less assumptions will try to take in account the churn rate over the period of time so that the LTV value would be more accurate...
and yes to your first question..

Author

Commented:
aiklamha,

If you take a look at the model I sent you will see an attempt to build out the math to create a LTV model.  Is the NPV representative of LTV or did I miss something?  How would I add "churn" into the model?  Any improvement ideas?

Thank you,

B.

Author

Commented:
Thanks guys!  You got me on the right track.......

B.

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