Customer lifetime value – CLTV

Customer Lifetime Value (CLTV) is a metric used in business to estimate the total revenue a business can reasonably expect from a single customer account throughout the business relationship. CLTV takes into account not just a single transaction, but the entire arc of engagement a customer has with a company, from their initial purchase through their entire period of activity or loyalty. This metric helps businesses in understanding the long-term value of maintaining good relationships with their customers, guiding decisions about marketing, sales, product development, and customer support. CLTV is crucial for determining how much a company should invest in acquiring new customers and retaining existing ones. High CLTV indicates a valuable, long-term customer, which can influence a company’s strategies in areas like customer service, upselling, and customer loyalty programs.