What is Customer Lifetime Value (CLV) | Marketing Analytics for Beginners | Part-30

In marketing analytics, customer lifetime value (CLV) is used to identify the total worth of a customer based on their relationship with the business. It is calculated by estimating the revenue each customer brings in every year, which helps businesses use their marketing resources to retain the most profitable customers.

This video discusses the advantages of estimating customer lifetime value and additional metrics such as customer acquisition cost (CAC), which helps businesses comprehend CLV more accurately. It gives examples of how to calculate CLV and CAC and how to use both to make better decisions. We answer questions such as: What is CLV? What is CAC? How to estimate CLV and CAC? What are the advantages of estimating customer lifetime value? How to build a healthier customer base? How do use CLV and CAC to boost business revenue streams? How to use CLV to develop marketing strategies?

Table of Contents:
0:00 – Introduction to customer lifetime value
0:50 – Calculate the customer lifetime value
1:24 – Customer acquisition cost
1:51 – Calculate the worth of the customer
2:23 – Boost business revenue stream
2:59 – Summary

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[maruthil]

CLV considering acquisition cost CAC is 750*5 - 2000 = 1750

[rancidrhino]

It is not specified if the $2000 was spent for one year or 5 years to acquire the customer

[joaomestre]

Hey, I fear you did something wrong: at 3:13 what you're asking us is if our business will be profitable at the end. The CLV was already calculated by multiplying 750 * 5 = 3, 750. You should rephrase as "If the cost to acquire the customer is $2000, will be a profitable decision to keep investing in marketing?

[saltsniffer]

this video is very useful ong frfr, i needed this video to help me open my eyes in the world of business WOAHWOAHWOAH

[silondilejali]

Hiyey, I'm a bit lost. Cause I followed the formula in the video and got 3750. But judging by the responses in the comments, does it mean that the formula for CLV = annual revenue x average number of reterion period - cost to acquire the customer?

[Stupid]

Oh. You have a way of expressing CLV that is really attractive and easy for me to understand. Thank you very much