Customer Lifetime Value is one of the key stats to track as part of a customer experience program

Customer Lifetime Value (CLV) represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.

This is an important figure to know because it helps you make decisions about how much money to invest in acquiring new customers and retaining existing ones.

In the big picture, CLV is a gauge of the profit associated with a particular customer relationship, which should guide how much you are willing to invest to maintain that relationship. That is, if you estimate one customer’s CLV to be $500, you wouldn’t spend more than that to try and keep the relationship. It just wouldn’t be profitable for you.

The Value of Knowing Your CLV

Calculating the CLV for different customers helps in a number of ways, mainly regarding business decision-making. Knowing your CLV you can determine, among other things


Acquire customers and maintain a profitable relationship


What kinds of products customers with the highest CLV


Which products have the highest profitability


Who your most profitable types of clients are