You’ve probably heard the term “customer lifetime value” (CLV) before, but what does it really mean? And more importantly, how can you calculate it for your own business?

CLV is a metric that measures how much a customer is worth to your business over the entire course of their relationship with you. It takes into account factors like customer purchase frequency, average order value, and customer retention rates.

In this article, we’ll break down CLV and show you how to use it for your own business.

What is the customer lifetime value?

Customer lifetime value (CLV) is the total amount of revenue a customer generates throughout their relationship with your business. It’s a key metric for measuring the financial value of customers. CLV estimates how much you can expect to earn from each customer over time, based on their behavior and purchasing patterns.

CLV doesn’t just focus on your current …