The CLV is the total value of a customer to a company from the time they first make a purchase to their final purchase. The following are examples of how the CLV can be calculated:
- The average order value for an e-commerce site has been calculated as $150. This means that the average customer spends $150 over their lifetime with that company, so the CLV would be $150.
- A customer who spends $1000 in one year with your company has a CLV of $1000.
- A customer who spends $100 per year with your company has an annual CLV of $100.