What Is Customer Lifetime Value (CLV) and How To Calculate It

In this guide, we will walk you through the steps to calculate customer lifetime value, including what data you need and how to interpret the result. We’ll also provide strategies for improving your CLV and optimizing your business’s revenue potential. What is Customer Lifetime Value?

Customer lifetime value, or CLV, is a metric that indicates the total revenue a business can reasonably expect from a single customer account throughout the business relationship. It considers a customer’s revenue value and compares that number to the company’s predicted customer lifespan.

The longer a customer continues to purchase from a company, the greater their lifetime value becomes. Therefore, customer support and success teams can directly influence CLV during the customer’s journey. Why is Customer Lifetime Value Important?

CLV is an important metric for businesses because it helps gauge financial viability and can improve customer retention with a data-driven understanding of what existing customers find valuable from your business…