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Introduction to Customer Lifetime Value

Introduction to Customer Lifetime Value

Learn the basics of calculating customer lifetime value.

Introduction

Customer lifetime value (CLV) is a measure of the total amount of money that a customer is expected to spend on a business's products or services throughout their relationship with the business. CLV is an important metric for businesses, as it helps businesses to understand the value of their customer base and to make decisions about how to allocate marketing resources and other investments.

Businesses that focus on a long-term relationship with their customers and sell products or services that require repeat purchases typically get the most value out of CLV analysis. For example, a subscription-based company like Netflix can use CLV analysis to predict how much revenue they will generate from a customer over ...