In order to find out the average value of the client you need to find out a number of parameters:
The average check is the average order size of one customer. In order to get the average check, you need to divide the amount of all received money from customers by the number of customers.
Average profitability is the average profit in the amount of sales. If we sold for $100 and in this amount our profit is 30%, then the profitability will be 30%.
Then we count the number of times the customer makes purchases during the period. If you have a grocery store you can count per month if a clothing store can count per year.
Next, we need to know how many periods the customer makes purchases from us until he stops buying at all.
Then we multiply these four parameters on each other and get the average value of the client.
