Calculating the lifetime value (LTV) of a massage client can help you understand how much revenue each client is likely to generate over the course of their lifetime. Here’s an example of how you might calculate LTV for a massage client:
- Estimate the average number of massages per year that each client is likely to purchase: For example, if the client visits for a massage once per month, that would be 12 massages per year.
- Determine the average revenue per massage: This can be done by looking at your revenue data and determining how much revenue you generate from an average massage.
- Determine the average retention rate: This is the percentage of clients that continue to visit your business after their first visit. A retention rate of 80% would mean that 80% of clients come back to your business.
- Multiply the average revenue per massage by the average number of massages per year to get the annual revenue per client. Then multiply the annual revenue per client by the average retention rate to get the lifetime revenue per client.
For example, if the average revenue per massage is $80, the average number of massages per year is 12, and the average retention rate is 80%, then the lifetime value of a massage client would be: (80×12)x80% = $768
It’s important to note that this is just an estimate and the actual lifetime value of a client may vary depending on the client’s specific circumstances and the specific business. Additionally, to make the calculation more accurate, other variables such as the average retention years of a customer, client loyalty, discounts, referrals, and others should be considered to get a more realistic number.
This calculation can help you make better decisions about how much to invest in marketing, how to target new clients, how much to charge for your services, and how to retain your clients.