Customer Lifetime Valuation (CLV) is a marketing metric that estimates the total value of a customer relationship, including present and future purchases. CLV can be used to help marketing and sales teams allocate resources and optimize marketing campaigns to maximize customer lifetime value.
There are a number of different methods for calculating CLV, but the basic idea is to estimate the amount of revenue (or profit) that a customer will generate over the course of their relationship with a company. This includes not only current purchases, but also future purchases and any referrals or other benefits that the customer may bring.
CLV is an important metric for businesses because it helps them understand which customers are most valuable and how to best allocate resources to grow their business. By understanding CLV, businesses can make more informed marketing and sales decisions that will ultimately lead to more growth and profitability.
There are a number of different ways to calculate CLV, but the most common method is to use historical data to predict future behavior. This includes looking at past purchase patterns, customer retention rates, and other factors. Other methods for calculating CLV include using surveys or customer interviews.