CLV (Customer Lifetime Value)
CLV (Customer Lifetime Value) is The total revenue a business expects to earn from a customer account over the entire duration of the relationship, used to guide acquisition spending, segmentation, and retention investment.
Customer Lifetime Value (CLV or LTV) is the total revenue you expect from a customer over their entire relationship with your company. It's the metric that connects acquisition cost to long-term profitability and determines how much you can afford to spend acquiring a customer.
CLV Calculation
Simple CLV = Average Revenue Per Account × Gross Margin % × Average Customer Lifespan
Example: $50K ACV × 75% margin × 4-year average lifespan = $150K CLV.
CLV:CAC Ratio
The CLV-to-CAC (Customer Acquisition Cost) ratio is the key efficiency metric:
- Below 3:1 — you're spending too much to acquire customers relative to their value
- 3:1 to 5:1 — healthy range for most B2B SaaS
- Above 5:1 — you're likely underinvesting in growth and leaving market share on the table
Why RevOps Cares
CLV drives resource allocation across the entire revenue engine. High-CLV segments get more sales attention, more CS investment, and more marketing budget. RevOps builds the models that calculate CLV by segment and surface it in the CRM for frontline decision-making.
See RevOps KPIs for how CLV fits into the broader metrics framework. NRR is the metric that most directly impacts CLV.
Frequently Asked Questions
Is CLV the same as LTV?
Yes. CLV (Customer Lifetime Value) and LTV (Lifetime Value) are used interchangeably. Some companies prefer CLTV. They all mean the same thing.
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