Customer Lifetime Value (CLV)

What is Customer Lifetime Value (CLV)? The Key to Marketing

Customer Lifetime Value (CLV), a business's relationship with that customer, from a single customer the total income he can expect to receive over his entire term predictive is an important metric in marketing. It helps companies understand how much they need to invest in customer acquisition and retention.

CLV takes into account factors such as average purchase value, purchase frequency, and customer life span. It is critical for determining marketing budgets, pricing strategies, and loyalty programs.

Example:

If a customer spends €100 each month and stays loyal for 3 years, their CLV will be as follows:

100€ x 12 months x 3 years = €3,600

This means that as long as it remains profitable, you can invest more than €3,600 in total acquisition and retention efforts.

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