Customer Lifetime Value (CLV)
Customer lifetime value or CLV represents the total revenue a company can expect from a customer relationship over time. Calculating CLV helps inform sales and marketing program decisions to acquire and retain ideal customers.
CLV calculations factor in key inputs like average purchase value, purchase frequency rates, and predicted customer lifespan or churn rate. The higher the CLV projection, the more that can be justifiably invested to acquire customers. Increasing CLV then relies on boosting retention, cross-sells, share of wallet, and order values.