Represents the total revenue a business can expect from a single customer over the duration of their relationship.

What it Measures ?

How much a customer is expected to spend during their relationship with the company.

Relevant StakeHolders 

Product Marketers, Retention Teams

In-depth Use Case / Real-world Example

CLV helps companies determine how valuable a customer is throughout their relationship, not just at the point of sale. It is typically calculated as: (Average Purchase Value × Purchase Frequency × Customer Lifespan). For example, if a B2B manufacturer sells equipment and the average customer spends $25,000 every year and stays for 5 years, the CLV is $125,000. This insight helps justify acquisition costs and plan long-term strategies. If CLV is significantly higher than CAC, the company is in a healthy position. It also drives strategies for customer retention, loyalty programs, and after-sales support. For marketing leaders, CLV is vital to segment customers based on profitability and invest more in high-value clients. Over time, increasing CLV can signal improvements in customer experience, service efficiency, and brand loyalty.