What is Customer Lifetime Value?
You can’t expect to grow your business if you don’t know the value of your customers. The very success of your business hinges on your projected revenue, so customer lifetime value (CLV) is the most important number any business can keep tabs on.
In the grand scheme of things, one purchase does not quantify the total value of a customer for a business. It’s not that simple. For instance, sales totals tell you nothing of churn and attrition or what referrals are bringing in. The key to CLV is the measure of the amount of profit you can expect to generate from any given customer over the duration of their relationship with your business.