Customer Lifetime Value (CLV)

Estimate the total revenue your business can reasonably expect from a single customer account.

Estimate Customer Lifetime Value

How to Use This Tool

  1. Average Order Value (AOV): The average amount a customer spends in one purchase.
  2. Average Purchase Frequency Rate: How many times an average customer buys from you in a year.
  3. Average Customer Lifespan: How many years an average customer remains active.
  4. Calculate: See the total revenue you can expect from a single customer over their entire relationship with your store.

Strategic Insights

Thinking Long-Term: Retention vs. Acquisition

Customer Lifetime Value (CLV) shifts your focus from a single transaction to the long-term relationship. It's often cheaper to retain an existing customer than to acquire a new one. A high CLV tells you that your customers are loyal and happy.

Knowing your CLV allows you to justify a higher Cost Per Acquisition (CPA). If you know a customer will spend $150 over two years, you can be more aggressive with your ad spend to acquire them, even if you don't make a profit on their first purchase. Focus on email marketing, loyalty programs, and excellent customer service to increase your CLV.