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What is Customer Lifetime Value (CLV)?

June 1, 2024
Family with cart in supermarket

Customer Lifetime Value (CLV) is a metric that measures the total value a customer brings to a business over their entire relationship. It represents the estimated revenue a customer will generate during their engagement with a company.

CLV takes into account factors such as:

  • purchase history
  • average order value
  • frequency of purchases
  • customer retention

By understanding CLV, businesses can make informed decisions about resource allocation, customer acquisition, and implement retention strategies. It helps identify the most valuable customers, prioritize marketing efforts, and optimize customer engagement to maximize long-term profitability. Businesses can focus on nurturing customer relationships, providing exceptional experiences, and implementing loyalty programs to increase CLV.

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