Customer Lifetime Value (CLV) is a metric that represents the total worth of a customer to a business over the entire duration of their relationship. It takes into account the potential revenue from all transactions made during the customer's relationship with the brand, rather than just individual transactions.
CLV can be calculated using either historical or predictive methods:
Several elements impact CLV, including:
To elevate your CLV, consider the following approaches:
CLV varies significantly across industries due to differences in customer behavior, business models, and market dynamics. Industries with frequent repeat purchases, such as subscription-based services, generally exhibit higher CLVs compared to those with infrequent customer interactions. Analyzing CLV across industries provides insights into marketing effectiveness, customer loyalty, and overall business health.
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