What is customer lifetime value?
Customer Lifetime Value (CLV) is a metric that estimates how much value (usually revenue or profit margin) any given customer will bring to your business…
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How do you calculate customer lifetime value?
There are many formulas available to calculate lifetime value. However, calculating predictive customer lifetime value at the individual level requires a complex model. The steps…
How do you know if your CLV metric is accurate?
Not all CLV models are created equal. If you’re reviewing CLV from your organization or a vendor, start by asking yourself a few questions to…
What is the difference between CLV and LTV?
Customer Lifetime Value is calculated at the individual level, while Lifetime Value is an aggregate metric.
Why is it important to calculate CLV at the individual level?
The most popular and commonly used customer lifetime value (CLV) models benchmark their strength on aggregate metrics. However, these models are incredibly inaccurate at the…
Can CLV change over time?
Yes, customer lifetime value is not a static metric. It changes over time as you observe new data about a customer. Knowing this, you can…
How can CLV improve marketing strategies?
Customer lifetime value is an important tool for marketers: CLV can help you target, retain, and provide exceptional service to your best customers. Once you…
Why is CLV important for segmentation?
It’s relatively simple to segment your current customers by attributes and/or past behavior. But if you want to predict the future behavior of your customers,…
What makes a customer high value?
Customer lifetime value (CLV) is the metric leading companies use to understand their customers’ purchasing habits. Simply put, customers who purchase higher-value products, who purchase…