What Is Customer Lifetime Value?
Take a look at your current customers. How well do you understand their value? Do you know how much revenue they produce for you? Do you understand how much it costs you to generate this revenue? And more importantly, are you able to predict these values into the future? Customer lifetime value (CLV) is an important metric for organizations who want to get a more accurate view of their customers and become more profitable in the process.
Understanding CLV allows you to make changes to your business to attract, convert, and retain more high-value customers, while increasing the overall value of your entire customer base.
While there are many simple approaches to calculating average CLV, predicting true customer-level CLV and implementing it as a performance metric across your entire organization is a complex process. Many companies fail when it comes to CLV because they underestimate the amount of change it will require to be successful. On the other hand,...