Customer Lifetime Value (CLV) is an important metric for businesses to track and manage. It helps them understand how much money they are losing by not retaining customers. It also helps them figure out how much it will cost to acquire new customers and how much profit they can make from each one.
Customer lifetime value refers to the entire amount a business earns from the average customer over the course of their relationship with the business
The churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity. It is most commonly expressed as the percentage of service subscribers who discontinue their subscriptions within a given time period.
CLV will help you find balance in terms of short-term and long-term marketing goals and demonstrate a better understanding of financial return on your investments. CLV encourages better decision making by teaching marketers to spend less time acquiring customers with lower value.