Customer Lifetime Value
Also written as: CLV — Customer Lifetime Value
A predictive metric estimating the total net revenue a retailer can expect from a customer throughout the entire duration of their relationship.
Full Definition
Customer Lifetime Value (CLV or LTV) projects the monetary worth of a customer to a retail business over time, factoring in purchase frequency, average order value, gross margin, and predicted churn probability. It is used to guide decisions on customer acquisition cost ceilings, loyalty programme investment, and personalised marketing spend allocation. CLV models range from simple historical averages to complex probabilistic frameworks such as the BG/NBD model. Editors should note that the abbreviation can appear as 'CLV', 'LTV', or 'CLTV' in analytics documents; consistency within a single document must be enforced.
Usage
Usage note: Spell out fully on first use. Abbreviation varies (CLV, LTV, CLTV); enforce consistency throughout the document. Do not confuse with CAC (Customer Acquisition Cost).
In Context
- "The loyalty analytics model segmented shoppers into five CLV tiers to prioritise personalised offers for the highest-value cohort." — CRM analytics report
- "Abbreviations CLV, LTV, and CLTV should not be used interchangeably in the same document; select one form and apply it consistently after spelling out in full at first use." — Editorial consistency note