04/22/2020
Customer Success Metrics 6: Customer Lifetime Value
Customer lifetime value, or CLV, is a measurement of how much an individual customer is worth to your company over time.
To calculate the CLV, you’ll need three pieces of data. They are:
Your average purchase value (total purchase revenue divided by total number of purchases)
Your average purchase frequency (for example, twice a month)
Your average customer lifespan (for example, three years)
Your CLV is a useful metric when you determine your marketing budget. It wouldn’t make sense to spend $1000 acquiring a new customer if your CLV is only $1,200. You’ll need to crunch the numbers to back into a customer acquisition and retention budget that makes sense.