Customer Lifetime Value Calculator for Finan

INSTRUCTI
Bl
For further information on use of the CLV calculator, email Geoff Fripp

STEP ONE = ENTER PROMOTIONAL EXPENDITURE PER NEW CUSTOMER

Total Spend on New Customer Acquisition (Promotion
10,000
and other elements)
Note: If Average Acquisition Cost is a
Number of New Customers Acquired 100 know, then enter it as the Total Spen
set the Number of New Customers

New Customer Acquisition Cost (automatically 100

calculated from above)

STEP THREE = ENTER IMPORTANT NOTE: T

REVENUE/COSTS (revenue and
three sets of costs below) Year 1 Year 2 Year 3

Average Customer Balance of Loans

10,000 15,000 15,000
and Savings

Average Interest Rate Margin 2.00% 1.95% 1.90%

Average Interest Contribution 100 146 143

Average Income from Fees and 50 60 70

Commissions and Other Sales
 Average Cost to Service Customer
25 30 35
(e.g. transaction services, statements)

Up-selling and Retention Costs per 10 10 10

RETAINED Customer pa

Average NET Profit Contribution PER

CUSTOMER per Year 115 166 168

STEP FOUR = ENTER EXPECTED

RETENTION RATE % N/A 70% 75%
(for Year 2 onwards)

% of total customers retained 100.0% 70.0% 52.5%

(used as probability of cash flow)

Average NET Profit Contribution OF

RETAINED CUSTOMERS ONLY before 115 116 88
acquisition cost

DISCOUNTED Average NET Profit

Contribution PER RETAINED 105 96 66
CUSTOMER before acquisition cost

OUTPUT SECTION

CLV = Net Present Value of 279

Customer's Profit Contribution
Average Customer Lifetime 3.0
(in years)

Internal rate of return (IRR) % 106.7%

OUTPUT SECTION

CLV = Net Present Value of Customer's Profit Contribu 279

Average Customer Lifetime (in years) 3.0

Internal rate of return (IRR) % 106.7%

 0.00

1 100 100
2 - -
3 - -
4 - -
5 - -
6 - -
7 - -
8 - -
9 - -
10 - -
0 11 - -
0 12 - -
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0 23 - -
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0 26 - -
0 27 - -
0 28 - -
0 29 - -
0 30 - -
0 31 - -
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0 36 - -
0 37 - -
0 38 - -
0 39 - -
0 40 - -
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0 42 - -
0 43 - -
0 44 - -
0 45 - -
0 46 - -
0 47 - -
0 48 - -
0 49 - -
0 50 - -
0
 0 1 2
Net Cash Flow -100 115 166
Retention pa 100% 70%
Compound Retention 1 100% 70%
NCF X CR (100) 115 116
Compound Discount 1 1.1 1.2
NCF X CR / CD (100) 105 96

Customer Base 100 70

Lost Custs 30 18
Yrs of Value 30 35

First Payback (100) 15 131

0 1 1
1 0
1 1 0
0.13 0.13 0.00
0.87
tor for Financial Institutions: Follow the Four Steps and Input Yo
INSTRUCTIONS: Complete the GOLD cells only
Blue cells should NOT be typed over
geoff@marketingstudyguide.com

W CUSTOMER STEP TWO = EN

Discounted Cash

Average Acquisition Cost is already This is an optional step - more important wit
hen enter it as the Total Spend and
Number of New Customers to 1. discounted cash

MPORTANT NOTE: This revenue/cost section MUST be completed on a PER individual customer basis

Year 4 Year 5 Year 6 Year 7 Year 8

20,000 20,000

1.90% 1.85%

190 185 0 0 0

80 90
 40 45

10 10

220 220 0 0 0

80% 85%

42.0% 35.7% 0.0% 0.0% 0.0%

92 79 0 0 0

63 49 0 0 0

For further information on the metrics please visit: www.clv-calculator.com

% ROMI on customer acquisition cost

(without discounting)
% ROMI on customer acquisition cost
(WITH discounting)

Payback (in Years) on acquistion cost

(taking into account % retention rate)
NOTE: If payback is not achieved, Years to Payback will be listed as "0.0" above

For further information on the metrics please visit: www.clv-calculator.com

% ROMI on customer acquisition cost (without discounting)

% ROMI on customer acquisition cost (WITH discounting)

Payback (in Years) on acquistion cost (taking into accou

NOTE: If payback is not achieved, Years to Payback will be listed as "0.0" above
1.00
1 2 3
100 100 - -
- 1 110.0% 121.0% 133.1%
- (100) 105 96 66
- 5 201 162
-
- 1 1 1
-
- 1 0 0
-
- 1 0 0
-
- (100) 115 116 88
- 15 131 219
-
- 1 1 1
-
- 1 0 0
-
- 1 0 0
- 1 2 3
- 1.18 (0.13) (1.49)
-
-
-
-
- (100) 115 116 88
- (100) 15 131 219
- 0 1 1 1
- 1 0 0
- 1 0 0
- 0.13 1.13 2.49
- 0.13043478261 0 0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
 3 4 5 6 7
168 220 220 0 0
75% 80% 85% 0% 0%
53% 42% 36% 0% 0%
88 92 79 - -
1.3 1.5 1.6 1.8 1.9
66 63 49 - -

53 42 36 - -
11 6 36 - -
32 25 179 - -

219 312 390 390 390

1 1 1 1 1
0 0 0 0 0
0 0 0 0 0
0.00 0.00 0.00 0.00 0.00
teps and Input Your CLV Data

or visit www.clv-calculator.com

STEP TWO = ENTER DISCOUNT RATE

Discounted Cash Flow Rate 10%

n optional step - more important with longer customer lifetimes - if you don't want to use
discounted cash flows, leave setting at 0%

dual customer basis

10 year
Year 9 Year 10
Year 11 (and Total/Avg
ongoing)

80,000

1.92%

0 0 0 764

350
 175

50

0 0 0 889

N/A

0.0% 0.0% N/A N/A

0 0 N/A 490

0 0 N/A 379

NOTE: Calculations below include any customer

profits from Years 11 to 50. If none required, set
Year 11 to zero.

w.clv-calculator.com

390%
 279%

0.9
.0" above

lv-calculator.com

390%

279%

0.9
 4 5 6 7 8 9 10
- - - - - - -
146.4% 161.1% 177.2% 194.9% 214.4% ### 259.4%
63 49 - - - - -
129 112 49 - - - -

1 1 1 0 0 0 0

0 0 0 -1 0 0 0

0 0 0 -7 0 0 0

92 79 0 0 0 0 0
312 390 390 390 390 390 390

1 1 1 1 1 1 1

0 0 0 0 0 0 0

0 0 0 0 0 0 0
4 5 6 7 8 9 10
(2.37) (3.97) #DIV/0! #DIV/0! #DIV/0! ### #DIV/0!
 92 79 0 0 0 0 0
312 390 390 390 390 390 390
1 1 1 1 1 1 1
0 0 0 0 0 0 0
0 0 0 0 0 0 0
3.37 4.97 #DIV/0! #DIV/0! #DIV/0! ### #DIV/0!
0 0 #DIV/0! #DIV/0! #DIV/0! ### #DIV/0!
 8 9 10 11 12 13 14
0 0 0 0 0 0 0
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
- - - - - - -
2.1 2.4 2.6 2.9 3.1 3.5 3.8
- - - - - - -

- - - - - - -
- - - - - - -
- - - - - - -

390 390 390 390 390 390 390

1 1 1 1 1 1 1
0 0 0 0 0 0 0
0 0 0 0 0 0 0
0.00 0.00 0.00 0.00 0.00 0.00 0.00
 11 12 13 14 15 16 17 18

345.2% 379.7% 417.7% 459.5% 505.4% 556.0%

- - - - - - - -

-6
285.3% 0
313.8% 0
345.2% 0
379.7% 0
417.7% 0
459.5% 0
505.4% 0
556.0% 0
1 611.6% 0
672.7% 0
1.18 740.0% 0
814.0% 0
2.18 895.4% 0
985.0% 0
1083.5% 0
 1191.8% 0
1311.0% 0
1442.1% 0
1586.3% 0
1 1744.9% 0
1919.4% 0
#DIV/0! 2111.4% 0
2322.5% 0
#DIV/0! 2554.8% 0
2810.2% 0
3091.3% 0
3400.4% 0
3740.4% 0
4114.5% 0
4525.9% 0
4978.5% 0
5476.4% 0
6024.0% 0
6626.4% 0
7289.0% 0
8018.0% 0
8819.7% 0
9701.7% 0
10671.9% 0
11739.1% 0
0
 15 16 17 18 19 20 21 22
0 0 0 0 0 0 0 0
0% 0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0% 0%
- - - - - - - -
4.2 4.6 5.1 5.6 6.1 6.7 7.4 8.1
- - - - - - - -

- - - - - - - -
- - - - - - - -
- - - - - - - -

390 390 390 390 390 390 390 390

1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
 19 20 21 22 23 24 25 26 27

611.6% 672.7% 740.0% 814.0% 895.4% 985.0% 1083.5% 1191.8% 1311.0%

- - - - - - - - -
 23 24 25 26 27 28 29 30 31
0 0 0 0 0 0 0 0 0
0% 0% 0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0% 0% 0%
- - - - - - - - -
9.0 9.8 10.8 11.9 13.1 14.4 15.9 17.4 19.2
- - - - - - - - -

- - - - - - - - -
- - - - - - - - -
- - - - - - - - -

390 390 390 390 390 390 390 390 390

1 1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
 28 29 30 31 32 33 34

1442.1% 1586.3% 1744.9% 1919.4% 2111.4% 2322.5% 2554.8%

- - - - - - -
 32 33 34 35 36 37 38
0 0 0 0 0 0 0
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
- - - - - - -
21.1 23.2 25.5 28.1 30.9 34.0 37.4
- - - - - - -

- - - - - - -
- - - - - - -
- - - - - - -

390 390 390 390 390 390 390

1 1 1 1 1 1 1
0 0 0 0 0 0 0
0 0 0 0 0 0 0
0.00 0.00 0.00 0.00 0.00 0.00 0.00
 35 36 37 38 39 40 41 42

2810.2% 3091.3% 3400.4% 3740.4% 4114.5% 4525.9% 4978.5% 5476.4%

- - - - - - - -
 39 40 41 42 43 44 45 46
0 0 0 0 0 0 0 0
0% 0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0% 0%
- - - - - - - -
41.1 45.3 49.8 54.8 60.2 66.3 72.9 80.2
- - - - - - - -

- - - - - - - -
- - - - - - - -
- - - - - - - -

390 390 390 390 390 390 390 390

1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
 43 44 45 46 47 48 49 50

6024.0% 6626.4% 7289.0% 8018.0% 8819.7% 9701.7% 10671.9% 11739.1%

- - - - - - - -
 47 48 49 50
0 0 0 0
0% 0% 0% 0%
0% 0% 0% 0%
- - - - 490 107%
88.2 97.0 106.7 117.4
- - - - 379

- - - -
- - -
- - - 3.00

390 390 390 390

1 1 1 1
0 0 0 0
0 0 0 0
0.00 0.00 0.00 0.00