e-Commerce Glossary · M-N

What Is Customer Lifetime Value (CLV)?

Customer lifetime value (CLV) is the total revenue or profit a customer is expected to bring over the course of their relationship with a business. It is calculated by taking into account the average order value, purchase frequency and how long the customer keeps buying. In e-commerce, CLV is used to determine how much advertising budget can be spent to acquire a new customer and to measure the impact of loyalty programs.