Customer Lifetime Value (CLV)

By: A Staff Writer

Updated on: Jul 19, 2024

What: Calculates the total revenue a customer is expected to generate over their lifespan, minus acquisition and retention costs.

Who: No single inventor, but it’s a core concept in customer-focused businesses.

Why: Helps entrepreneurs shift focus from single transactions to the long-term, making better investment decisions.

When: Setting marketing budgets, prioritizing customer retention efforts, or evaluating pricing strategies.

How:

1. 1. There are different formulas (simple to complex).
   2. It relies on accurate data for good results.