Metrics > Customer Lifetime Value
Customer Lifetime Value (CLV)
Definition: Customer Lifetime Value (CLV) estimates the total revenue a business can expect from a customer over their relationship with the company.
Formula:
(Avg Purchase Value × Purchase Frequency) × Customer Lifespan
Why It Matters:
A higher CLV means better long-term profitability and customer loyalty.
How to Improve:
- Offer personalized recommendations and upsells
- Enhance customer retention strategies
- Improve customer support and engagement
Relevant Integrations:
Example Calculation:
If a customer spends $50 per order, buys 5 times per year, and stays for 3 years:
CLV=(50×5)×3=750