Customer Lifetime Value (CLV)

Definition of Customer Lifetime Value (CLV)

The total revenue a business can reasonably expect from a single customer account throughout the business relationship.

Explanation of Customer Lifetime Value (CLV)

Customer lifetime value (CLV) is a metric that estimates the total revenue a business can expect from a customer over the duration of their relationship. It takes into account the customer’s purchase history, frequency, and average order value. CLV helps businesses understand the long-term value of their customers and make informed decisions about marketing, sales, and customer service investments. By increasing CLV, companies can achieve higher profitability and sustainable growth. Strategies to improve CLV include enhancing customer experience, fostering loyalty, cross-selling, and upselling. Monitoring CLV provides insights into customer behavior and the effectiveness of retention efforts.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.