The net present value (NPV) of a customer is just the value today of all of all future revenue minus the cost today of all future expenses associated with them.

The net present value (NPV) of a customer is just the value today of all of all future revenue minus the cost today of all future expenses associated with them. The key is that it factors in a "discount rate" to account for the fact that cash in the future is worth less than cash today. So future cash is discounted by some ℅, compounded annually. If a customer will pay $100, and it costs $90 to acquire them, without taking time into consideration it would look like $10 in profit. But if you have to spend the $90 today, and you only get the $100 in five years, they might not actually be a profitable customer. Conversely, if that same $100 revenue customer cost $105 to acquire, but they paid today and you only spent $105 to acquire them in five years they might actually be profitable (this scenario is probably less likely, but maybe if you are acquiring them through some channel where the costs are deferred for some reason). Excel and a lot of other spreadsheets have a built in NPV function to make the calculation easier. You can simply give it the series of expected costs and revenue associated with the customer, and a discount rate (how much to discount future cash by, compounded annually) and it will give you the NPV.