How To Calculate Lifetime Value in Sage 100 | Arithmix

Calculating lifetime value is an essential aspect of any business, and Sage 100 offers a powerful tool to help you do just that. In this article, we'll explore what lifetime value is, why it's valuable to calculate it, and how you can do so using Sage 100.

What Is Lifetime Value?

Lifetime value, or LTV, is a metric that measures the total amount of revenue a customer will generate for your business over the course of their lifetime. It takes into account not only the initial purchase but also the customer's potential for repeat business and referrals.

Calculating LTV can help you determine how much you should be willing to spend to acquire new customers and how much you should invest in retaining existing ones. It can also help you identify your most valuable customers and tailor your marketing efforts accordingly.

When Is It Valuable To Calculate Lifetime Value?

Calculating LTV is valuable for businesses of all sizes and industries. It's particularly useful for businesses with a subscription-based model or those that rely heavily on repeat business.

For example, a software company that charges a monthly subscription fee would want to know the LTV of their customers to determine how much they should spend on customer acquisition. If the LTV of a customer is $1,000, the company may be willing to spend up to $500 to acquire that customer, knowing that they will generate a profit over time.

Similarly, a retail business that relies on repeat business would want to know the LTV of their customers to determine how much they should invest in loyalty programs and other retention efforts. If the LTV of a customer is $500, the business may be willing to spend up to $50 to retain that customer, knowing that they will generate a significant amount of revenue over time.

Overall, calculating LTV is valuable for any business that wants to make data-driven decisions about customer acquisition and retention.

Now that we've covered what LTV is and why it's valuable, let's take a look at how you can calculate it using Sage 100.

How Do You Calculate Lifetime Value in Sage 100

Sage 100 itself isn’t naturally geared towards letting you calculate complex metrics like Lifetime Value. As an alternative, teams typically use products like Arithmix to import data from Sage 100 and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sage 100, combine it with data from other systems, and create calculations like Lifetime Value.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Lifetime Value in Arithmix

Calculating metrics like Lifetime Value is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sage 100 data, and use it to create natural language formulas for metrics like Lifetime Value.

Arithmix is designed to give you the power to build any calculations you want on top of your Sage 100 data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.