Customer Lifetime Value (CLV) is the projected total revenue a customer will generate throughout their relationship with a company, taking into account factors like purchase frequency and customer lifespan.

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Why is Customer Lifetime Value (CLV) important?

CLV is crucial as it allows companies to identify high-value customers, allocate resources effectively, and develop strategies to increase customer retention and long-term profitability.

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An easy way to understand Customer Lifetime Value (CLV)

Imagine the total amount of money a customer will spend on a company's products or services throughout their entire relationship with the business.

Easy Way to Calculate Customer Lifetime Value (CLV)

A simple way to calculate Customer Lifetime Value (CLV) is to multiply the average purchase value by the average number of purchases per year and then multiply that by the average customer lifespan in years.

For instance, if a customer spends an average of $50 per purchase, makes 4 purchases per year, and remains a customer for 5 years, their CLV would be $50 x 4 x 5 = $1,000.

At Kosme Aesthetics​​ we leverage customer lifetime value to help our clinics to focus on retaining clients through personalized services and loyalty programs, thereby enhancing our profitability over time.