The term Customer Lifetime Value (CLV) is particularly at home in the fields of e-commerce and digital retail, digital marketing, and digital transformation. It describes the estimated total value that a customer brings to a company throughout the entire business relationship.
Practically speaking, this means that Customer Lifetime Value (CLV) indicates how much a customer spends on products or services on average over time. Companies use this figure to better plan how much they should spend on acquiring and servicing a customer. If the CLV is high, it is usually worth investing more in customer loyalty.
A clear example: An online shop recognises that loyal customers spend €300 on average per year and stay for an average of 5 years. The customer lifetime value then amounts to €1,500. This helps the company to optimise marketing and service costs.
In summary: Customer Lifetime Value (CLV) is an important tool for determining the long-term value of a customer and strategically building successful customer relationships.
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