What is Customer Lifetime Value (CLV)?
Customer Lifetime Value (CLV) measures
how much value a customer brings to a company over the entire time they do business together.
CLV takes into account:
- the revenue generated by the customer,
- the costs to acquire and keep them, and
- the duration of the relationship.
CLV is an important metric for companies looking to
evaluate the profitability of their marketing efforts and sales strategies.
How CLV Fits into Your Business Strategy
Knowing the CLV helps businesses make better decisions about how to allocate their resources, and plan marketing strategies. By analyzing CLV, companies can
- find their most valuable customers,
- adapt marketing campaigns, and
- increase customer loyalty with personalized offers and communication.
In short,
understanding CLV allows you to invest more effectively and build stronger, more profitable customer relationships.
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