Your customer lifetime value (CLTV) is:
$
There are different ways to calculate this metric, but our simple CLTV calculation assumes the length of time that a customer will stay with you (calculated from monthly churn) and multiplies that by the amount that the average customer will pay each month.
This isn't unusual – enterprise customers may stay with a SaaS business for three to five years, whereas smaller customers paying on credit card may stay just a few months. Large SaaS businesses will tend to segment customers accordingly and calculate different lifetime values based on the size of customer or average monthly revenue.
Our calculation is simple – it's worth spending some time looking at some of the more advanced ways SaaS practitioners and businesses think about and calculate customer lifetime value.