Cleaning & janitorial
Cleaning Customer Lifetime Value Calculator
Work out what a commercial contract is worth across its likely life including renewals.
Result
Gross profit, not revenue, because revenue you spend delivering the work is not available to spend winning customers. Referrals are the least reliable input here; measure yours rather than assuming.
Get a Free Business AuditWhat moves the number
- Annual contract value and expected number of renewals.
- Additional and periodic work over the relationship.
- Whether the customer has other sites.
Where this one goes wrong
Ignoring multi-site potential. A single site contract with a customer who has twenty buildings is worth far more than its own value if it is delivered well, and that is the real reason to over-deliver on a first site.
Questions
About this calculator
How long do commercial contracts last?
Longer than many expect when service is good, because changing cleaning contractors is disruptive. Retention is largely a service quality question rather than a price one.
Does multi-site potential change how I bid?
It can justify a thinner margin on a first site, provided the potential is real and the decision is deliberate rather than hopeful.
What loses commercial contracts?
Consistency failures and poor communication far more often than price. A contract lost on price usually had a service problem the customer was already unhappy about.
The formula
lifetime value = average job x jobs per year x years x gross margin
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Average job value ($). Enter your own figure; the page starts at $195.
- Jobs per customer per year. Enter your own figure; the page starts at 1.4.
- Years they stay. Enter your own figure; the page starts at 6.
- Gross margin (%). Enter your own figure; the page starts at 42%.
- Customers they refer. Enter your own figure; the page starts at 0.4.
The result updates as you type, so you can try a figure, see what it does to lifetime gross profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Average job value | $195 |
| Jobs per customer per year | 1.4 |
| Years they stay | 6 |
| Gross margin | 42% |
| Customers they refer | 0.4 |
What comes out
| Result | Value |
|---|---|
| Lifetime gross profit main result | $687.96 |
| Lifetime revenue | $1,638 |
| Including referred customers | $963.14 |
| Gross profit per year | $114.66 |
One customer is worth $687.96 of gross profit over 6 years, or $963.14 once the people they refer are counted. That is what you can afford to spend winning one.
How sensitive the answer is
Holding everything else steady and changing only average job value, this is what happens to lifetime gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average job value ($) | Lifetime gross profit |
|---|---|
| $98 | $345.74 |
| $146 | $515.09 |
| $195 example above | $687.96 |
| $293 | $1,034 |
| $390 | $1,376 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Average job value ($)
- A money amount, starting at $195.
- Jobs per customer per year
- A number, between 0 and 60, starting at 1.4.
- Years they stay
- A number, between 0 and 60, starting at 6.
- Gross margin (%)
- A percentage, between 0 and 95, starting at 42%.
- Customers they refer
- A number, between 0 and 20, starting at 0.4.
What the results tell you
| Result | What it is |
|---|---|
| Lifetime gross profit | The headline result. A money figure. |
| Lifetime revenue | A money figure. |
| Including referred customers | A money figure. |
| Gross profit per year | A money figure. |
Time is the variable that bites
Pricing that works out on paper fails when the job takes longer than quoted. First cleans, heavily soiled sites and access problems all run over, so it is worth pricing the first visit separately from the recurring one.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.