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Acronyms Dictionary

CLV

Definition

Customer Lifetime Value. A prediction of the net profit attributed to the entire future relationship with a customer.

Deep Dive

CLV (also known as LTV) is a prediction of the total revenue a business will earn from a single customer over the entire duration of their relationship. Understanding CLV helps businesses decide how much they can afford to spend on CAC.

Examples & Use Cases

  • 1Calculating that a customer who pays $50/month for 2 years has a CLV of $1,200
  • 2Increasing CLV by implementing an effective upsell strategy for existing users
  • 3Focusing marketing efforts on "high CLV" segments to maximize long-term profit

Related Terms

CACChurnRetention

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