Customer Lifetime Value (CLV)

Customer lifetime value, or CLV, estimates the value a customer may contribute over the course of their relationship with a business. A recurring lawn care customer might book many visits, while a one-time repair customer may purchase only a single job. Businesses calculate CLV in different ways, using revenue or profit-based approaches and assumptions about repeat purchases, retention, and costs. Those choices should be stated clearly; a rough projection is not a guaranteed future amount. CLV differs from customer acquisition cost, which focuses on the expense of winning a customer. Looking at both can support better decisions, but only if the business has reliable records and avoids treating every inquiry as a customer.