Customer lifetime value ( CLV )

Customer lifetime value (CLV or CLTV) is a measurement indicating the overall net profit a business anticipates earning from a customer over their entire engagement with the company. It assesses the value a customer brings during their journey as they make repeat purchases and maintain loyalty. By considering factors like purchasing frequency and average spending, CLV helps companies understand the long-term profitability of each customer. This metric aids in making informed decisions regarding customer acquisition costs and marketing strategies, aiming to maximize customer satisfaction, enhance retention, and ultimately boost revenue over the course of the customer-company relationship.