In marketing, customer lifetime value (CLV) is a metric that represents the total net profit a company makes from any given customer.
CLV helps organizations demonstrate the future value they can generate from their marketing initiatives.
Formula to calculate CLV.
![Calculate Customer Lifetime Value.](https://www.learntocalculate.com/wp-content/uploads/2020/07/CLV-1.png)
Lifetime value is the product of average value of sale, number of transactions and retention time period.
Example:
The lifetime value of a regular customer of a shop is $600. The profit margin in the clothing store is 15%. Calculate the customer lifetime value.
![Calculate Customer Lifetime Value.](https://www.learntocalculate.com/wp-content/uploads/2020/07/CLV-2-1.png)
Thus, the customer lifetime value is $ 90.