Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is the total revenue you expect from a single customer across your whole relationship with them, not just one order. It adds up every purchase they make until they stop buying from you. When you know this number, you stop thinking in single transactions and start thinking in long term relationships.

CLV matters because it guides how much you should spend to acquire and retain customers. If you know a customer is likely to be worth a few hundred dollars over time, you can confidently invest more in ads, welcome flows, and support. It keeps you from overspending on low value audiences and helps you double down on people who stick around.

A simple way to use CLV is to compare it to your customer acquisition cost. If it costs $50 in paid traffic and email to win a customer and their CLV is around $300, that is a healthy trade. You can also track CLV by segment, like by channel or country, so you know where your best customers come from and where to focus your marketing.