Customer lifetime value (CLV)
Customer lifetime value is a measure of the total income a business can expect to bring in from a typical customer for as long as that person or account remains a client.Customer lifetime value helps you understand and gauge current customer loyalty. If customers continue to purchase from you time and time again, that’s usually a good sign you’re doing the right things in your business. Furthermore, the larger a customer lifetime value, the less you need to spend on your customer acquisition costs.Understanding CLV allows you to make informed decisions based on how long a customer typically buys from you and what they spend over the lifetime of that relationship. This metric can help inform your strategy on acquisition, customer retention, customer support, and even the quality of your products and services.