Knowledge base · Strategy & growth

Customer Lifetime Value

Customer Lifetime Value is the total value a customer brings for as long as they stay a customer.

Looking only at the first order, you never dare invest enough in new customers. Knowing a guest returns four times on average changes the maths entirely.

You calculate CLV from average order value, purchase frequency and how long someone stays a customer, ideally on margin rather than revenue. Then you decide what you may pay at most to win a customer.

It also shows where retention beats acquisition. One percent less churn often weighs heavier than one percent more new customers.

How we do it

We evaluate campaigns on customer value over time, not on the first order alone.

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Related terms

POAS

POAS is Profit On Ad Spend: profit per euro of ad budget, so ROAS with margin factored in.

Retention

Retention is keeping existing customers, measured as the share that comes back.

First-party data

First-party data is data you collect yourself from your own customers and visitors, without a middleman.

Conversion

A conversion is the action you want from a visitor: an order, booking, enquiry or sign-up.

Curious what this means for your brand?

We look at your numbers with you and show where the gains are, in plain language.

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