Customer Lifetime Value

Overview

Customer Lifetime Value (CLV) tells you the total net revenue expected from a customer over their relationship with your store, enabling smarter decisions on acquisition spend, retention investment, and customer tier management. Most platforms calculate historical CLV (total spent to date) natively. For predictive CLV and churn risk scoring, use a dedicated analytics app (Klaviyo, Metorik, Triple Whale) or build a custom model for stores with 10k+ customers.

When to Use This Skill

• When setting CAC targets for acquisition channels based on expected return
• When building a VIP tier program that needs a quantitative threshold
• When predicting which customers are likely to churn and triggering win-back automation
• When calculating the ROI of retention programs (loyalty points, VIP benefits)
• When segmenting customers by predicted future value rather than historical spend alone

Core Instructions

Step 1: Determine platform and choose the right CLV tool