skip to Main Content

What is customer lifetime value?

There are thousands of articles on customer lifetime value. Understanding how to calculate customer lifetime value is really only part of the puzzle. Being able to understand the real value of a customer to your business can give you a different perspective on your marketing and why it’s important to continue marketing to the customer even after you’ve acquired them.

Customer lifetime is the entire value a new customer delivers to your business. Instead of measuring the exact dollar amount you generate in that first sale, the true lifetime value of your customer would include any repeat purchases and referrals. This number will demonstrate to you the real value of your customer to the business.

Understanding customer lifetime value can give you a new incentive to maximise repeat purchases or generate referrals from your existing customers. These untapped marketing goldmines can give you ongoing outcomes and a great return on investment. If you know that you can potentially generate more from a lead you to turn into a sale further down into your customer life-cycle, your ability and confidence to spend more on your marketing will increase.

Customer lifetime value is an important metric you should track and your marketing should always be targeted at both new leads and existing customers to maximise your return on investment.

Back To Top