Estimate customer lifetime value simply

Prompt that estimates customer value over the whole relationship using contribution margin and an honest range. Paste it into an AI tool of your choice, which then estimates customer value.

Topic: Spreadsheets & data
Type: Prompt
Level: Intermediate
Time: about 10 min

Results depend on the tool, the model and what you enter.

Result preview

Example: written by our editors, not real AI output.

Formula: order value × purchases per year × years, using contribution margin | | cautious | middle | optimistic | | Margin per order | €14 | €16 | €18 | | Purchases per year | 3 | 4 | 5 | | Years | 1.5 | 2 | 3 | | Customer value | €63 | €128 | €270 | Biggest effect: length of the customer relationship Cap for acquiring a new customer: about €40 (a third of the middle value) Missing: cancellations in the food subscription

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BusinessWhat do you sell?

FiguresPaste the figures you have, such as order value, purchases per year, churn rate and costs, without customer names

PurposeWhat do you need the value for?

Your prompt

Estimate customer lifetime value for our business.
Business: [Business]
Figures:
<figures>
[Figures]
</figures>
What the estimate is needed for: [Purpose]
Approach: 1. Pick a suitable simple formula, such as average order value times purchases per year times length of the relationship, or for subscriptions monthly amount divided by the monthly churn rate, and explain the choice. 2. Use contribution margin instead of revenue, that is after cost of goods, shipping and payment fees. 3. Give a range with a cautious, middle and optimistic value, and show which assumption has the biggest effect. 4. Calculate separately for two or three sensible groups, such as acquisition channel or first product, if the figures allow it. 5. Present everything in a table with formulas I can copy into a spreadsheet. 6. Work out the most a new customer may cost to acquire. Mark missing figures with "Missing:" instead of inventing them.

Take particular care to use contribution margin instead of revenue and never invent missing figures.

Before you answer, check: Are all instructions met? If key information is missing or a placeholder in square brackets is still in the text, ask instead of guessing. Mark assumptions as assumptions.

Estimate customer lifetime value for our business.
Business: [Business]
Figures:
<figures>
[Figures]
</figures>
What the estimate is needed for: [Purpose]
Approach: 1. Pick a suitable simple formula, such as average order value times purchases per year times length of the relationship, or for subscriptions monthly amount divided by the monthly churn rate, and explain the choice. 2. Use contribution margin instead of revenue, that is after cost of goods, shipping and payment fees. 3. Give a range with a cautious, middle and optimistic value, and show which assumption has the biggest effect. 4. Calculate separately for two or three sensible groups, such as acquisition channel or first product, if the figures allow it. 5. Present everything in a table with formulas I can copy into a spreadsheet. 6. Work out the most a new customer may cost to acquire. Mark missing figures with "Missing:" instead of inventing them.

Take particular care to use contribution margin instead of revenue and never invent missing figures.

Before you answer, check: Are all instructions met? If key information is missing or a placeholder in square brackets is still in the text, ask instead of guessing. Mark assumptions as assumptions.

This is an instruction for an AI, not the result itself.

Where this prompt works

These AI tools are a good fit for this prompt:

How to use it

Fill in the fields or tap a suggestion. Leave out names, addresses and other personal data.
Copy the finished prompt into an AI tool of your choice.
After six months, check the estimate against real figures for a group you have followed from the start, and adjust the assumptions.

Why does this work?

With revenue instead of contribution margin, almost every customer looks valuable and ad budgets end up too high. The range and the key assumption show how solid the number really is.

Tips

A young business often lacks the real length of customer relationships. Then calculate with a fixed period, such as three years, and say so.

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Estimate customer lifetime value simply

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