What is customer lifetime value (CLV)?

Definition

Customer lifetime value (CLV) is the estimated total revenue a single customer generates over the entire period they remain a customer, rather than the revenue from one single purchase.

Context

Where a conversion rate shows whether a website turns visitors into customers, CLV shows what that customer is worth afterwards. A low price per purchase can still be profitable if customers keep coming back; a high one-off purchase is worth less if customers don't return.

CLV can only be measured reliably when customer data and purchase history come together in one place. With standalone tools — a webshop here, a separate CRM there — that calculation has to be done by hand. On a platform where orders, customer data and communication already come together, CLV becomes a figure that surfaces on its own instead of something pieced together after the fact.