What is your customer really worth?
A single transaction is the tip of the iceberg. Customer Lifetime Value shows the full value of the relationship - and how strongly it grows when a customer stays with you longer.
How do we calculate this?
Annual customer value = AOV × purchases per year × margin. CLV over the horizon is the sum of annual values across consecutive years, weighted by retention - the value of year N decreases proportionally to the probability that the customer still buys. Retention growth compounds, which is why even a few percentage points significantly raise CLV.