I'm working on a school project where I and other group members come up with a business idea and write a paper containing all necessary information about the business, like the business model, revenue streams, customer segments, etc.

The part I'm struggling with is calculating Customer Lifetime Value. The general idea of our theoretical business is that we'd be selling recycling plants to the Indian government. Our pricing model would include an initial payment of roughly 300k dollars and an annual upkeep cost of about 170K dollars. To me, our idea is basically a subscription service, but we don't know how to calculate CLV from our business model, because most equations to calculate CLV require the knowledge of your business's churn rate, which I believe would be 0% because theoretically we wouldn't be losing customers, at least for the close future. We'd theoretically only have one or two customers for our first few years, where we wouldn't lose customers.

If anyone could help me here and correct me if I'm tackling this in a completely wrong way I'd be grateful. Thanks!


closed as off-topic by Alex C, JejeBelfort, skoestlmeier, amdopt, AdB Apr 11 at 9:20

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    $\begingroup$ I'm voting to close this question as off-topic because it is outside the scope of Quant Finance. $\endgroup$ – Alex C Apr 10 at 1:28

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