What is Customer Lifetime Value (CLV)?
Customer Lifetime Value (LTV) is a metric that represents the total value a customer is expected to generate for a business over the entire duration of their relationship. It calculates the potential revenue a customer will bring in throughout their engagement with the company.
LTV takes into account various aspects, including:
- Purchase History: The total amount a customer spends on products or services over their entire relationship with the business.
- Repeat Purchases: If customers tend to make multiple purchases, the LTV incorporates these additional transactions.
- Retention Period: The duration a customer typically stays engaged with the business. This can vary significantly between industries and businesses.
Customer Acquisition Cost (CAC) vs. Customer Lifetime Value (CLV)
In this article, we are going to learn What are the difference between Customer Acquisition cost (CAC) and Customer Lifetime Value(CLV).
Table of Content
- What is Customer Acquisition Cost (CAC)?
- What is Customer Lifetime Value (CLV)?
- Lifetime Value (LTV) Vs. Customer Acquisition Cost (CAC)