What is Customer lifetime value (CLV)?
Customer lifetime value (CLV) is an estimate of the total revenue or profit a business can expect from one customer over the whole relationship. It combines how much a customer spends, how often they buy and how long they stay, and can be calculated from history or predicted with a model.
Why it matters for your business
CLV tells you how much you can afford to spend acquiring and keeping each type of customer, and which segments deserve the most attention from sales and support.
An online retailer finds that customers whose first order comes from its subscription range have a much higher CLV, so it shifts ad spend toward promoting that range to new visitors.