Customer Lifetime Value CLV calculation process

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Customer Lifetime Value CLV is a key metric for any business. It is the total profit that a company can expect from an average customer over the customer's lifetime.

The equation for calculating CLV is: CLV = (Average Annual Spend) x (Number of Years) x (Annual Retention Rate) The CLV formula calculates the average annual spend and retention rate of customers. The number of years in which they will be spending money with the company is also calculated.

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