Back to Glossary


What Is CLV?

CLV (Customer Lifetime Value) is the total sum of money a buyer is expected to spend on your business services or products within a lifespan of an average relationship with your business.

How To Calculate CLV?

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 $.

What Is A Good Customer Lifetime Value?

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$.

How To Increase Customer Lifetime Value?

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:

  • Work on your product returns strategy.
  • Work on your loyalty program.
  • Improve your client service.
  • Run exclusive deals and campaigns.
  • Constantly improve the quality of your products and services.
  • Stay in touch with your clients and learn about them better.

Difference Between CLV And LTV

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.


Why is Customer Lifetime Value important?

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.

What are the three components of CLV?

CLV components include:

  • Buyer acquisition cost.
  • The annual profit of a client.
  • The average lifetime of a buyer.

You May Find It Interesting

How To Reduce eCommerce Returns WIth Rich Product Content

The Role Of Rich Product Content In eCommerce Return Management

High return rates have plagued the eCommerce sector. How can help product rich content management to deal with this challenge?

Read more
What You Should Know During eCommerce App Development for Successful PIM Software Implementation
3 min read

eCommerce App Development for Successful PIM Software Implementation

When you're working on a mobile application, it's crucial to consider the future integration of PIM solutions.

Read more
Mobile Commerce Future

The Evolution And Beyond: Exploring The Future Of Mobile Commerce

Curious about the technologies shaping the future of mobile commerce? Interested in upcoming trends in m commerce? Read the article.

Read more
PIM Tool for eCommerce Product Data Enrichment
5 min read
Gepard Updates

Gepard Features Hub: PIM Tool For eCommerce Product Data Enrichment

In this article, you will find out deep insights about the Gepard product data enrichment tool and why it is necessary for eCommerce business

Read more
15 Facts About eCommerce That Leave You Open-Mouthed

15 Facts About eCommerce That Leave You Open-Mouthed

In this article, we will explore 15 insightful facts about eCommerce that will leave you astonished and eager to learn more.

Read more
Product Feed Optimization Trends

Product Feed Optimization Trends: Driving Revenue and Sales

Here are some 2023 industry trends on how you can optimize your product feed for increased revenue and sales.

Read more
2 min read
Gepard Updates

Ovia Lighting Chooses Gepard PIM For Strengthening Products Offerings In The Electrical Wholesale Market

Gepard is delighted to announce its new client Ovia Lighting Ltd. It specializes in supplying a range of light fittings.  

Read more
eCommerce Site Search Trends From Expert

10 eCommerce Site Search Trends From Experts

Let’s discover the top 10 eCommerce website search trends from experts that would be actual in the nearest 5 years.

Read more

Top 6 Experts’ Insights On Implementing Product Data Enrichment In An eCommerce Strategy 2023

These insights will assist you with actionable strategies to enhance your product data and maximize impact on your customers and bottom line.

Read more

Let’s Get In Touch

Need to contact us? Just use this form

Gepard Privacy Policy