Customer Lifetime Value, often shortened to CLV or LTV, is the total revenue you can reasonably expect from a single customer over the entire time they stay with you. It is one of the most useful numbers a business can know.
Why it matters
CLV sets the ceiling on what you can afford to spend acquiring a customer. If a customer is worth 3,000 dollars over their lifetime, spending 300 to win them is a great deal. Without CLV, you are flying blind on your acquisition budget.
How to raise it
- Reduce churn, since keeping customers longer directly raises CLV.
- Increase how often or how much they buy.
- Improve the experience so people stay and refer others.
Honestly, for most businesses, nudging CLV up is easier and cheaper than chasing more new customers.