Customer Lifetime Value
From Business Heroes Food Truck Simulation
Customer Lifetime Value (CLV) is the total amount of money a customer is expected to spend with a company from the time they make a purchase until they stop buying. In other words, it estimates the total amount of money a customer is worth to a business. CLV is important because it allows businesses to invest in acquiring and retaining customers in a way that is profitable in the long-run. Customer acquisition and retention are both important for business growth, but they can be expensive. Without CLV, it would be difficult to make decisions about how much to invest in each. In general, the larger the customer lifetime value, the less a business needs to spend on its customer acquisition costs.