Philadelphia Taxi Rates Calculator

Estimated Customer Lifetime Value: $0.00

Average Customer Lifespan: 0 Months

Total Profit per Customer: $0.00

function calculateCLV() { var arpu = parseFloat(document.getElementById('arpu').value); var churn = parseFloat(document.getElementById('churnRate').value); var margin = parseFloat(document.getElementById('grossMargin').value); var resultsDisplay = document.getElementById('resultsDisplay'); if (isNaN(arpu) || isNaN(churn) || isNaN(margin) || churn <= 0) { alert("Please enter valid positive numbers. Churn rate must be greater than zero."); return; } // Calculations // Lifespan = 1 / churn rate var lifespan = 1 / (churn / 100); // CLV = (ARPU * Lifespan) * Gross Margin var clvRaw = arpu * lifespan; var clvNet = clvRaw * (margin / 100); // Display document.getElementById('clvValue').innerText = "$" + clvRaw.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('lifespanValue').innerText = lifespan.toFixed(1) + " Months"; document.getElementById('profitValue').innerText = "$" + clvNet.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultsDisplay.style.display = 'block'; }

What is Customer Lifetime Value (CLV)?

Customer Lifetime Value (CLV or LTV) is a fundamental metric for SaaS and subscription-based businesses. It represents the total amount of revenue a business can expect from a single customer account throughout their entire relationship with the company.

Why CLV Matters for Your SaaS

Understanding your CLV allows you to make data-driven decisions regarding your marketing budget, sales strategies, and product development. If your Customer Acquisition Cost (CAC) is higher than your CLV, your business model is likely unsustainable in the long run. A healthy SaaS business typically aims for a CLV:CAC ratio of 3:1 or higher.

The Formula Used in This Calculator

This calculator utilizes the standard SaaS industry formula:

• Customer Lifespan = 1 / Monthly Churn Rate
• Gross CLV = ARPU × Customer Lifespan
• Net CLV (Profit) = Gross CLV × Gross Margin %

Real-World Example

Imagine your SaaS product has the following metrics:

• ARPU: $100 (Your average customer pays $100/month)
• Churn Rate: 5% (5% of your customers cancel every month)
• Gross Margin: 80% (It costs you $20 in server/support costs to serve that $100 customer)

Using the calculator: Your average customer stays for 20 months (1 / 0.05). Your Gross CLV would be $2,000 ($100 × 20). After accounting for your 80% margin, your actual profit per customer is $1,600.

3 Ways to Improve Your CLV

1. Reduce Churn: Focus on customer success and product-led growth to keep users subscribed longer.
2. Increase ARPU: Implement upsells, cross-sells, or tiered pricing strategies to increase the value of each account.
3. Improve Efficiency: Increase your Gross Margin by automating support or optimizing cloud infrastructure costs.