Customer lifetime value (CLV) is a metric that measures the total business earnings from a customer throughout their entire relationship.
Why does Customer Lifetime Value matter?
It is not a secret that it is more difficult to make a new customer purchase than an existing one. The better the CLV is, the more revenue customers can bring to business over time. It helps to understand customer behaviour and better meet their needs, as well as to find out who the ideal customer is and get the most value out of it. It can also help to reduce CPA and help when deciding on growth strategies.
Calculation:
CLV = customer value x average customer lifespan
