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What is lifetime revenue?
Lifetime revenue is an estimate of a customer's total revenues throughout their lifetime with your business. Unlike lifetime value, lifetime revenue does not include gross margin or cost factors. To calculate lifetime revenue, multiply your average cart value by average number of purchases for a given time and then multiply by your average customer lifetime using the same unit of time. So an average cart value of $50 by 2 for average number of monthly purchases, then multiplied by 20 months looks like: (50 x 2) x 20 = $2000. So, over a period of 20 months, you can expect a new customer to spend and average of $2000.
How can I use lifetime revenue?
Generally speaking, you don't want to use lifetime revenue by itself as it doesn't include all of the other costs associated with acquiring the customer, maintaining the customer and operational costs. It is necessary for calculating your lifetime value!
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