What is Customer Lifetime Value (CLV)?

The customer lifetime value (CLV) comprises all expenditures made by a customer from the beginning of the customer relationship and thus includes all purchases, services, and add-ons. The CLV thus helps to estimate how valuable a customer is, or how valuable he will become in the course of the business relationship.

Calculation of Customer Lifetime Value

CLV = Average purchase value x Number of purchases per year x Average customer relationship in years