Key Terms:
The ABCs of CLV

Get definitions for commonly used terms and acronyms in the customer intelligence space. For more detailed resources, check out the CLV Academy.

CLV

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 over the course of the total time they interact with your brand—past, present, and future.

LTV

Lifetime Value (LTV) is the lifetime spend of customers in aggregate. LTV is an aggregate metric, unlike CLV, which is calculated at the individual customer level.

CAC

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer. CAC is made up of your sales and marketing costs.

CLV to CAC

CLV to CAC is the ratio of Customer Lifetime Value to Customer Acquisition Cost. This metric helps you optimize your marketing campaigns to acquire profitable customers.

Cohort

A group of customers that behave similarly or share a defining characteristic.

Churn

Churn is the rate at which customers stop purchasing from or doing business with your company.

Persona

A representation of a group of customers with similar characteristics, features, and/or behaviors.

Lookalike audience

A group of people on a social network that are similar to a group of your existing customers, based factors like demographics, behavior, location, etc.