Lifetime Value (CLV) - Definition

Customer Lifetime Value (CLV) is a crucial metric used by businesses to estimate the total net profit a customer will bring throughout their relationship with the company. It provides valuable insights into how much each customer is worth over time, which helps businesses make informed decisions about customer acquisition costs, retention strategies, and resource allocation. A high CLV signifies that a company is not only attracting customers but also retaining them and maximizing their long-term value. To achieve this, companies employ various marketing techniques and strategies aimed at increasing customer satisfaction, loyalty, and engagement. These can include personalized marketing, loyalty programs, excellent customer service, and consistent follow-ups to ensure that customers continue to make repeat purchases.