Understanding your value of a customer over a period of time helps you better calculate true ROI. First, start by calculating the average revenue per purchase. Then calculate the average frequency of a purchase (example: over a 1 year period how many purchases are made from the same customer). Next, calculate customer value by multiplying the average purchase value by the average purchase frequency. Then, calculate the average customer lifespan by averaging the number of years a customer continues purchasing from your company. Last, multiply customer value by the average lifespan. This should give you the total value of a customer over the life of the customer.