How to calculate customer value?

Neither am I.

Are you asking as a vendor, or as an affiliate? (Not easy to tell, when you say "maybe makes a purchase or something"! What might the "something" be?).

Lifetime customer value, or lifetime subscriber value? You said "customer" in the title, but I'm guessing that you probably mean “subscriber”, really. And that way it’s totally my fault if I’ve guessed wrong.

Anyway, different people monitor this in very different ways, and you have a range of options open to you. It's good that you want to do it, anyway.

Which method of doing this will suit you best is likely to depend both on the niche (some, like "house-foreclosure avoidance", tend to be very fast-moving, others quite the opposite), the traffic demographics, and your own marketing methods.

One method that can work quite well is to monitor your total monthly income and compare it with the mid-month or month-end subscriber numbers, hoping eventually to work out an average figure of "income per subscriber per month". Many people use this or a variation of it. From that figure, and your average "length of subscription" figure, you can eventually estimate the "lifetime subscriber value".

I do it very differently, myself, using a parameter I haven't seen others discussing here. I try to monitor "the proportion of subscribers who buy one or more ClickBank products through my affiliate links at some point during the course of the email series they receive from me." It's considerably harder to measure reliably (I'm an affiliate, not a vendor), but it's also far more helpful and meaningful information to me, because - given my traffic demographics - it even has considerable cross-niche relevance, too.

"Aweber or GetResponse" is the realistic choice, for autoresponders. This thread will help you: http://www.warriorforum.com/email-ma...te-thread.html

Now, you're really going to have to explain exactly what you're doing, for anyone to answer that one! Really, you may get more helpful and less confusing answers from others than from me, if you can give more information about exactly what you’re doing.


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Just insert the variables yourself and voila...

I'm asking as a vendor.

I see that others use InfusionSoft to get this data as it has more options than aweber.

What I'm asking is how do I figure out the customer lifespan and then the lifetime customer value from that because I can't see how I can do this in aweber even if I try to move buyers to a different list.

And I don't want to do it manually... taking each person one by one and such...

You have 3 main variables when approaching a question like this.

Traffic Volume: How many people are you actually engaging?
Conversion Rate: How many people take an action?
Conversion Value: What's the returned value of each specific value?

Let's take an example as follows...

Traffic Volume = 100,000
Conversion Rate = 1%
Conversion Value= $3.00

First, we calculate the total actions possible using our current model, which is 1,000.

TrafficVolume x ConversionRate = totalActions

100,000 x 1% = 1,000

Second, we multiply our totalActions by Conversion Value.

totalActions x ConversionValue = CollectiveCustomerValue

1,000 x $3.00 = $3,000

ValueReturned = $3,000

The question boils down to how many actions are available to visitors and how much value you attribute to each action. It's super easy when a customer is purchasing a product with a monetary value, but it's gets more complicated when you attributing values to non-monetary actions (like sharing on Social Media).

These answers are not as complicated as some might lead you to believe

Essentially you want to use a basic formula like the one above and attribute value to every action you think is worth tracking. If it's not worth tracking it's probably not valuable.

You would run these calculations on each value and could ultimately add them up to get the answers you were looking for. I would totally recommend paying a developer $40 - $100 to build a simple calculator that would help you solve this problem much quicker.

LFGdating I'm looking for a way to not do this manually because if there are hundreds of people then this would be a gruesome task.

KamesCG - this is not my question

whenever someone buys something I put them in one list, and when he buys something else I put them in a different list...
this is the only way I do it
but it does not calculate average customer value over the customer lifespan
I know aweber doesn't track sales, but it can do basic list segmentation functions...
albeit not very useful for my question... how do I get the customer value number...
so yes, I am asking for tools to do this...
I know infusionsoft can do this but it's quite expensive monthly
Do you understand my question? Based on your questions and answers it sounds like you don't know the answer either

Calculate Your Customer Lifetime Value in 15 Seconds

Check out Putler... seems like a perfect fit for you.

Insightful Business Analytics for Web Entrepreneurs - Putler

Zaxaa has an LCV report if you use them as your cart/affiliate management system. I have no skin in the game recommending them. Just another tool for you to consider if you're interested in LCV and profit predictions etc.

RJ

It depends on each situation.

Depending on your company model, and pricing model, it all depends.

Basically just take your profit and subtract anything you used to get that 1 customer.
This can be fees, marketing, other expenses, etc.

Then factor in if you are doing re-bills, etc.

Here is an epic post on the subject of customer value optimization:

Customer Value Optimization: How to Build an Unstoppable Business

If you are using Zaxaa premium automation, you can easily know your Lifetime Customer value (LCV).

- Nizam