Customer Lifetime Value
Customer lifetime value, or CLV, is the total revenue or profit a business can expect from a single customer across the entire relationship. It combines average purchase value, purchase frequency, and how long a customer stays active to estimate long-term worth rather than a single transaction.
Why It Matters
CLV reframes acquisition spend around long-term return rather than the first sale. It shows how much you can afford to spend to win a customer and reveals which segments and channels bring the most valuable buyers.
Common Mistake
Optimizing campaigns purely on cost per acquisition while ignoring CLV. A cheap-to-acquire customer who never returns can be worth far less than a pricier one who buys repeatedly for years.