CLTV (Customer Lifetime Value)

The Customer Lifetime Value (CLTV) is a unit of measurement in marketing and represents the worth of every single user for a company.

Closely considered, the CLTV is the total amount of money a company is earning by a customer within his “customer life” i.e. as long as the person is using a service or brand of this company. So basically the term “Customer Lifetime Value” is not just referring to the current value of a customer for a company, but also includes a forecast of how much the company is going to earn with this customer in the future.

In terms of customers, the CLTV is an important unit to use their resources for customer relationship management as efficient as possible.

For companies, the customer lifetime value is an important measurement as it encourages them to shift their focus from quarterly profits to the long-term health of their customer relationships.