CLV – Customer Lifetime Value

Definition

Customer Lifetime Value (CLV, also LTV) forecasts the total net revenue a customer generates over the duration of the business relationship. CLV is crucial for determining a sustainable CAC and long-term budget planning. Companies with high CLV can justify higher acquisition costs.

Formula

Optimization Tips

Increase purchase frequency through email marketing and loyalty programs. Raise AOV through cross- and upselling. Reduce churn rate through excellent customer service. Personalize communication based on purchase history.