← DictionaryLifetime Value
also called CLV, customer lifetime value
The total profit expected from a customer over the whole relationship.
What one customer is worth over time.
What It Is
You will find Lifetime Value in the Business layer, alongside the rest of Unit Economics. In practice it means this: the total profit expected from a customer over the whole relationship.
It is something measured and compared over time, so one reading in isolation tells you almost nothing. Once it is defined that clearly, arguments about it usually stop.
How It's Used
You will usually meet Lifetime Value in commercial decisions, pricing conversations and how the business runs. It normally appears alongside Customer Acquisition Cost, Churn and Retention Rate. The practical test is whether it is measured the same way each period, against something.
Why It Matters
Lifetime Value is cheap to get right early and awkward to fix late. When it is unclear, margin leaks in places nobody is looking. Clarity here removes a surprising amount of downstream argument.
Picture a speedometer. It tells you how fast, not whether you are going the right way. What one customer is worth over time.
Termshift™
How the meaning shifts depending on who is using it, and where.
Professionally, Lifetime Value carries the narrow meaning: the total profit expected from a customer over the whole relationship.
Explained to someone with no marketing background, Lifetime Value is what one customer is worth over time.
The Bottom Line
If you only keep one thing about Lifetime Value: what one customer is worth over time. Everything after that is detail.