🧠 What This KPI Tells You
This metric answers the question:
“How much is a recurring customer worth to my business over time?”
It’s especially useful for forecasting growth, prioritizing customer retention, and making smart decisions about how much to invest in acquiring or supporting customers.
📊 How It's Calculated
The formula we use is:
Lifetime Value of Recurring Clients = Annual Value per Recurring Client ÷ Attrition Rate
📍 Step 1: Calculating the Annual Value per Recurring Client
We look at your recurring revenue over the past 12 months and divide it by the number of unique recurring clients.
Formula:
Annual Value =
Total revenue from recurring clients in the last 12 months
÷
Number of unique recurring clients in that time
We include:
Only services that are linked to invoices
Only events associated with actual customers
Only events marked as recurring
Events that occurred within the last 12 months
Only events from your company (not cross-account)
Only active (non-cancelled) events
Revenue is calculated by:
Summing up (Service Price × Quantity) for each eligible event.
Client count is calculated by:
Counting the number of unique customers in those same eligible events.
📍 Step 2: Calculating Attrition Rate
The attrition rate reflects how many recurring events were canceled in the past 12 months, compared to the total number of recurring events during that same period.
Formula:
Attrition Rate (%) =
Canceled recurring events ÷ Total recurring events × 100
We check:
Only recurring event records
Events active within the last 12 months (based on start/end dates)
Only cancellations marked explicitly as canceled
Events must belong to your company
📍 Step 3: Calculating Lifetime Value
Once we have the Annual Value and the Attrition Rate, we divide them to get the LTV.
Final Formula:
Lifetime Value = Annual Value per Recurring Client ÷ Attrition Rate (%)
Example:
If a customer brings in $1,000 per year, and 10% of your customers cancel each year, then:
LTV = $1,000 ÷ 0.10 = $10,000
This means the average recurring client is worth $10,000 over their lifecycle.
💡 Why It Matters
The higher your LTV, the more value you're generating from each client relationship. This helps guide decisions around:
Customer acquisition costs
Loyalty programs and retention strategies
Pricing structure
Service quality improvements
A lower attrition rate improves LTV, so this metric also encourages investment in customer satisfaction and operational consistency.