Customer Lifetime Value (CLV) allows marketers to address a number of important decisions in a financially controlled manner.

  • How much should invested in acquiring a new customer?
  • Which customers are strategically most important and most valuable?
  • How much should be invested in reactivating or retaining an existing customer?
  • What is the company’s future profit outlook based on the customer base and its expected future performance?

CLV should be estimated for an average customer and then broken down by key variables such as age, income, original source, first purchase type and geography. This information gives a marketer much more specific direction for programs to build the customer base.

© Marketing Analysis Applications, Inc.