Back
Rohith R
I help businesses to...Ā ā¢Ā 1y
Most of the small business owners forget (or) don't care to calculate CLV. I recently had a call with my client who seems very frustrated with his marketing performance and sees marketing has money draining machine with no positive effects to company. I asked him 2 questions, what's your ROAS and CLV. He somewhat came with ROAS concept, But he had no clue what's the CLV (Customer lifetime Value) is?... I said, CLV plays a important role from planning your marketing budget to pricing of the product. He was shocked that he is not aware of this important concept. I teache'd him it's importance and how to calculate it. In this post, I will teach you the same and how you can also calculate it for the business. Save this post :) What is Customer Lifetime Value (CLV)? CLV stands for Customer Lifetime Value. It is the total revenue a business can expect to earn from a single customer over the entire time they interact with the business. Imagine you run a coffee shop. If a regular customer buys a ā¹50 coffee from you every week and continues to visit for 5 years(Average estimation), the CLV would be: Average purchase value Ć Purchase frequency Ć Average customer lifespan ā¹50 (per visit) x 52 weeks x 5 years = ā¹13,000 This means this one customer will likely bring ā¹13,000 in revenue over their "lifetime" as a customer. Easy right?, Ok now why is this important to calculate??, I will give you 3 solid points why you should - Guides Marketing Spending: If a customer has a CLV of ā¹13,000, spending ā¹2000 to acquire them makes sense, but spending ā¹8000 does not. Improves Profitability: By focusing on high-value customers, businesses can prioritize those who bring in more revenue. Example: A subscription service may spend more effort retaining a customer who spends ā¹500/month over one who spends ā¹100/month. Shapes Retention Strategies: Understanding CLV helps justify investment in customer service and loyalty programs. Example: A restaurant offering free meals after 10 visits keeps high-value customers coming back. Before blaming the marketing as money gamble, Make sure first you done the marketing right ;) (From a marketing employees associationš ) Hope this post helped!, Follow for more marketing stuffs!
Replies (5)
More like this
Recommendations from Medial
Kush Katara
I Help Start-up Foun...Ā ā¢Ā 1y
What would be your approximate Customer Lifetime Value (CLV)? You run a mobile app that offers premium subscriptions for ā¹500 per month. Last year, you acquired 1,200 new customers, and your marketing spend for customer acquisition was ā¹1.2 lakh.
See More
Centriagal performance marketing agency
24 karat pure meta a...Ā ā¢Ā 3m
The Real Metrics That Grow a Business Most businesses fail because they run ads without tracking three critical metrics: 1ļøā£ ROAS (Return on Ad Spend) ROAS tells you how much revenue you generated from every ā¹1 spent on ads. For example, if you sp
See More
Vivek Joshi
Director & CEO @ Exc...Ā ā¢Ā 10m
Mastering Unit Economics Unit economics isnāt just a metricāitās your startupās financial DNA. It reveals whether each customer adds value or drains cash. Hereās how to build your unit economics from scratch: 1. Define Your Economic Unit What drives
See More
Abhay Thakur
Ā ā¢Ā
HCL EnterpriseĀ ā¢Ā 1y
Feature Friday: What Drives Your Business Strategy? As entrepreneurs, we're constantly navigating complex decisions and trade-offs. But what if you had a single metric that guided all your strategic choices? Cast your vote: A) Customer Acquisition
See More
Mridul Das
Introvert!Ā ā¢Ā 1y
š 10 CEO KPIs Every Business Leader Must Track! šš¼ Running a business? These 10 Key Performance Indicators (KPIs) will help you stay ahead! š„ š Financial Performance: ā Revenue Growth ā How fast are you growing? š ā Gross & Net Profit Margin ā
See More
SamCtrlPlusAltMan
Ā ā¢Ā
OpenAIĀ ā¢Ā 11m
Just read an awesome article from ZScale Capital on key metrics for business growth! šš If you're building a company, you NEED to be tracking metrics like Customer Acquisition Cost (CAC), Customer Lifetime Value (CLV), Daily/Monthly Active Users (
See More
Anup Thatal
IT enthusiastic | Fu...Ā ā¢Ā 8m
Some glimpse of business full form ? GTM:- go to market LTV:- lifetime value MVP :- Minimum viable product GT:- General Trade SP:- selling price ROI:- return on investment ROAS:- Return on advertising spend DAU:- Daily Active user MAU:- Monthly A
See More
Devendra Pagar
Founder @ Bunny Bask...Ā ā¢Ā 6m
A first month review for our Startup "Bunny Basket" ā¢Total revenue- Rs 45,754/- ā¢Customer Repeat started on 11th day itself ā¢ 75+ website orders within 15 days ā¢ Customer Repeat rate for the month 67% ā¢ Average order value 576/- ā¢ Average selling
See More
Thakur Ambuj Singh
Entrepreneur & Creat...Ā ā¢Ā 12m
Maximizing Customer Value! š An Expansion Moat allows companies to upsell and cross-sell seamlessly, increasing customer lifetime value. Zoom offers enterprise solutions, Amazon expands through Prime and Alexa while Salesforce strengthens client rel
See More
/entrackr/media/post_attachments/wp-content/uploads/2021/08/Accel-1.jpg)
Download the medial app to read full posts, comements and news.