Calculating Customer Lifetime Value (CLV) is a metric used to understand how much a customer is worth throughout their lifetime engagement with your business. It takes into account the value of past, current and future purchases, as well as related costs such as advertising and customer service, to provide an overall picture of the true value of each customer. Knowing your CLV can help you identify and target those customers who are most likely to contribute the most to your bottom line in order to maximize profitability.