Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is the estimated total revenue or contribution margin a customer generates across the entire duration of the business relationship. It helps you align and prioritise marketing budgets by long-term customer value rather than by the value of a first order alone.
In practice
In practice, the GA4 "User lifetime" exploration template (under Explore) provides retrospective figures on revenue and engagement to date per user cohort, while additional tools such as predictive metrics can supply a forward-looking, probability-based revenue figure per user. A high CLV often justifies higher acquisition costs per new customer, for example through more expensive advertising channels, as long as the long-term return exceeds the cost. Without a CLV perspective, marketing success is easily measured on the first purchase alone, which undervalues subscription and repeat-purchase models in particular.