Customer Lifetime Value (CLV)

Definition: Customer Lifetime Value (CLV) is a metric that represents the total revenue a business expects to generate from a customer over the entire duration of their relationship. CLV takes into account factors like average order value (AOV), purchase frequency, customer retention rate, and the overall length of the customer relationship.

For email and popup marketing, knowing the CLV helps businesses prioritize high-value customers, create personalized experiences, and calculate the return on investment (ROI) for retention-focused campaigns. A higher CLV indicates that a business is retaining customers effectively and maximizing revenue from existing relationships.

Example: If a customer spends $50 every 3 months for two years, their CLV would be $400 ($50 x 8 purchases).