What is Customer lifetime value (CLV)?
Customer lifetime value (CLV) is the total amount of money a customer will spend on your products or services over the course of their relationship with your business.
This metric takes into account not just the initial purchase but also repeat purchases, referrals and other factors that contribute to a customer's overall value to your company. By understanding CLV, you can determine how much you should invest in marketing efforts for each individual customer and make strategic decisions about how to improve retention and reduce churn rates.
In short, knowing CLV helps businesses understand the long-term potential of their customers and implement strategies to maximize profitability over time.