Customer Lifetime Value, often abbreviated CLV or LTV, measures the total revenue a business can expect from a single customer over the duration of their relationship. It shifts marketing focus from short-term sales to long-term profitability. A customer who buys repeatedly or subscribes for years is far more valuable than one who converts once and never returns.
CLV combines three elements: purchase frequency, average order value, and customer lifespan. By analyzing these, marketers can estimate how much each customer is truly worth — and how much it makes sense to spend on acquisition or retention. A higher CLV allows for greater marketing investment because the return is spread over time.
Improving CLV means nurturing loyalty. Exceptional customer experience, personalized offers, and proactive support all extend relationships. Loyalty programs, subscription models, and re-engagement campaigns keep customers active.
Focusing on CLV transforms how teams make decisions. Instead of chasing volume, they prioritize quality. The goal becomes not just to win customers, but to keep them, delight them, and turn them into advocates who generate value beyond their own purchases.
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