Customer Lifetime Value (CLV) is an important metric for measuring the effectiveness and profitability of businesses. By understanding it, companies can measure the overall value of each customer over their lifetime rather than just the financial or transactional value from one purchase. In simple terms, CLV is a formula used to calculate the net present value of a customer’s future revenue. It answers the question: How much is a customer worth to you? To calculate CLV, you must know the annual revenue for each customer, their transaction frequency rate, and their average customer lifespan. With this data in hand, you can then use the CLV formula to assess your bottom line. Ultimately, knowing the CLV of your customers allows you to create smarter marketing strategies and maximize the return on investment. So don’t let yourself get bogged down by mundane metrics – start thinking strategically about your customers and their lifetime value today!