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Business
Customer Lifetime Value
The total revenue a business expects to earn from one customer over the entire relationship.
CLV is calculated as Average Order Value × Purchase Frequency × Customer Lifespan. Improving CLV through better retention and upselling is often more profitable than acquiring more new customers.
It's how much one customer is worth if they keep coming back for years instead of buying just once.
Real world: A subscription box service finds the average customer stays 18 months and spends £30 per month. Their CLV is £540. This number helps them decide how much they can afford to spend to acquire each new customer.
💡 High customer lifetime value turns one-time buyers into a reliable profit engine.