CLV (Customer Lifetime Value)

Customer Lifetime Value (CLV) is a metric that helps businesses understand the long-term total value a customer brings during their entire relationship with the company. CLV considers not just one purchase but the potential for repeated purchases and the overall revenue a customer generates. To calculate CLV, you typically consider factors including how often a customer buys from you, the average purchase amount, and the expected duration of the customer's relationship with your business. This helps identify your most valuable customers and lets you allocate resources more effectively, such as via marketing efforts or loyalty programs.