HVAC
HVAC Customer Lifetime Value Calculator
Work out what a customer is worth across the whole relationship, not just the first job.
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
- Retention, which multiplies everything else.
- Maintenance agreement membership, which drives both retention and frequency.
- The eventual replacement, which is usually the largest single transaction.
Where this one goes wrong
Modelling lifetime value and then acquiring customers who churn. The number is only real if retention matches the assumption, and most businesses assume better retention than they achieve.
Questions
About this calculator
What drives HVAC lifetime value most?
Retention through to the replacement. A customer retained across the life of their equipment brings maintenance, repairs and eventually a full system, and losing them before that forfeits most of the value.
How do maintenance agreements affect it?
They raise both retention and contact frequency, which is why they matter more than the fee suggests. A member is far more likely to still be a customer when the system needs replacing.
Should referrals be counted?
They are real value but hard to attribute. Counting them makes the number larger and less reliable; it is worth tracking separately rather than folding in.
The formula
lifetime value = average job x jobs per year x years x gross margin
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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 $620.
- Jobs per customer per year. Enter your own figure; the page starts at 1.6.
- Years they stay. Enter your own figure; the page starts at 6.
- Gross margin (%). Enter your own figure; the page starts at 48%.
- 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 | $620 |
| Jobs per customer per year | 1.6 |
| Years they stay | 6 |
| Gross margin | 48% |
| Customers they refer | 0.4 |
What comes out
| Result | Value |
|---|---|
| Lifetime gross profit main result | $2,857 |
| Lifetime revenue | $5,952 |
| Including referred customers | $4,000 |
| Gross profit per year | $476.16 |
One customer is worth $2,857 of gross profit over 6 years, or $4,000 once the people they refer are counted. That is what you can afford to spend winning one.
How sensitive the answer is
Holding everything else steady and changing only average job value, this is what happens to lifetime gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average job value ($) | Lifetime gross profit |
|---|---|
| $310 | $1,428 |
| $465 | $2,143 |
| $620 example above | $2,857 |
| $930 | $4,285 |
| $1,240 | $5,714 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Average job value ($)
- A money amount, starting at $620.
- Jobs per customer per year
- A number, between 0 and 60, starting at 1.6.
- Years they stay
- A number, between 0 and 60, starting at 6.
- Gross margin (%)
- A percentage, between 0 and 95, starting at 48%.
- 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. |
Before you rely on this number
Sizing, capacity and load figures here are planning estimates. A real installation depends on the manufacturer's data for the specific equipment, the duct system it is going into, and a proper load calculation for the building. Use this to sanity-check a number or price a job, not to select equipment.
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.