Customer Lifetime Value (CLV / CLTV)
What is Customer Lifetime Value?
Customer Lifetime Value (CLV) is a financial metric estimating the total net profit a customer generates over their relationship with a company, discounted for time. It accounts for revenue, costs, retention rates, and discount rates.
In the Customer AI Masterclass (Unit 1.3: CX Metrics, Part 2), CLV is described as similar to enterprise valuation models on Wall Street. Though powerful, it is underused due to complexity. Related measures like Net Revenue Retention (NRR) and Earned Growth are introduced as simpler, more actionable alternatives. Customer AI enhances CLV by predicting drivers of retention, upsell, and churn.
