CLV (stands for: Customer Lifetime Value) – A value indicating what the customer’s value is to the online store. It is the sum of the revenues that the client can generate for the company during their cooperation period. By calculating the CLV, we can better optimize the activities and the resources we allocate to marketing activities, as well as obtain information on the profitability of a single customer. An important parameter in calculating CLV is user retention, i.e., the percentage of people who return to the store. To calculate CLV, multiply the annual revenue generated by the customer by the average number of years of customer retention and subtract the cost of acquiring the customer from the value obtained.
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