Customer Lifetime Value (CLV) is a financial estimate of the net present value of the entire stream of sales (revenue) that a customer would generate if they supported a company throughout their entire customer life. It is a critical metric for measuring long-term profitability.
CLV emphasizes that retaining a customer is often much more cost-effective than acquiring a new one, as loyal customers buy more, more often, and require less marketing spend. Maximizing CLV directs marketing efforts toward improving service, building loyalty, and cross-selling programs.
