How To Calculate LTV in Acumatica | Arithmix

Calculating LTV (Lifetime Value) is an important metric for any business looking to understand the long-term value of their customers. While there are many ways to calculate LTV, the process can be made easier with the help of Acumatica, a cloud-based ERP software that can provide valuable insights into your customer data.

What Is LTV?

LTV is a measure of the total revenue a customer will generate for your business over the course of their relationship with you. This includes all purchases, subscriptions, and any other revenue streams that come from that customer. By calculating LTV, businesses can better understand the value of their customer base and make informed decisions about marketing, sales, and customer retention.

There are several ways to calculate LTV, but one of the most common methods is to take the average revenue per customer and multiply it by the average customer lifespan. This gives you a rough estimate of the total value of each customer to your business.

When Is It Valuable To Calculate LTV?

Calculating LTV is valuable for any business looking to understand the long-term value of their customers. This is especially important for businesses that rely on recurring revenue streams, such as subscription-based services or SaaS companies. By understanding the LTV of their customers, these businesses can make informed decisions about pricing, marketing, and customer retention.

Calculating LTV can also be valuable for businesses that are looking to expand their customer base or enter new markets. By understanding the LTV of their existing customers, these businesses can better target their marketing efforts and make informed decisions about customer acquisition.

Overall, calculating LTV is an important metric for any business looking to understand the long-term value of their customers. With the help of Acumatica, businesses can easily calculate LTV and use this information to make informed decisions about marketing, sales, and customer retention.

How Do You Calculate LTV in Acumatica

Acumatica itself isn’t naturally geared towards letting you calculate complex metrics like LTV. As an alternative, teams typically use products like Arithmix to import data from Acumatica 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 Acumatica, combine it with data from other systems, and create calculations like LTV.

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 LTV in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your Acumatica 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.