Here’s a CLV formula: Customer Lifetime Value = Customer Value * Avg Customer Lifetime
Customer Value = Avg Sale Value * Avg Transactions Number.
For example, a regular Flowers store client has been buying a bouquet worth 30$ once per month for 10 years. In this case, Customer Lifetime Value = 30 $ * 12 * 10 = 3600 $.
In general, a good CLV should cover your buyer acquisition cost. It’s a good scale if your client’s lifetime value is 3-5 times bigger than your buyer acquisition cost. For example, if you spend 200$ on getting a new buyer, your goal should be to reach a CLV of at least 600$.
The key to boosting your CLV is selling more to your existing customers, as it’s easier to sell to existing buyers than invest in getting new ones. Here are some tactics to raise the likelihood of purchasing from you that will increase your CLV:
These terms share the same meaning, with the main difference being that lifetime value (LTV) focuses more on the cumulative value of all clients having a relationship with your business, meanwhile CLV deals with an individual client.
This figure is significant for client retention, as you can better calculate how much you should invest in retaining your clients, plan how to lower your acquisition costs, and get a closer look at your eCommerce business health and review your retention and acquisition strategies.
CLV components include:
A good read is a great way of upskilling and learning new strategies in eCommerce. Here is a must-read eCommerce booklist in 2023.Read more
We have collected the top 10 most-read materials about Shopify in 2022 so you can get complete information about this platform.Read more
Learn about the guidelines for PIM implementation and software features that will help you address challenges the process can face.Read more
Full guideline about all the necessary elements you should know about EPREL e-seal for an eCommerce business.Read more
Learn how the PIM tool can automate prosuct data-related tasks and simplify product information manager flows.Read more
Struggling with the questions before going on the PIM tool demo? We prepared a full guide for brands, retailers, and big marketplaces to better explore a PIM solution.Read more
Effective data management is essential for any business. Learn about the role of data mapping in eCommerce and boost your sales today.Read more
Learn how to manage product content expectations of brands and retailers to improve the shopping experience and boost sales.Read more
BMEcat doesn’t make sense? Find out what this standard is, why it is beneficial to your DIY business, and how you can implement it.Read more
Find out the difference about product experience and customer experience and learn how to build a loyal customer base with the help of the PIM system.Read more
Need to contact us? Just use this form