Customer Lifetime Value

Customer Lifetime Value (CLV) is a metric that measures how much customers have spent with you since they became a customer. The CLV panel displays your customers’ current lifetime value while  providing a lens to anticipate what their value — as a group — is as they progress through their lifecycle as a customer. More pointedly, these graphs predict what a certain type of customer will be worth to you as the retailer in the future.  

Like Average Order Value (AOV), CLV can reveal upward trends. This information can help inform which marketing strategies to implement and, possibly, which ones to sunset.

Customer Lifetime Value Related to Lifetime Number of Orders 

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Customer Lifetime Value by Lifetime Number of Purchases is generated by plotting the average lifetime value of customers that purchased within the date range against the lifetime number of purchases made by those customers. The purchases included in the chart are the purchases across all data available regardless of the date range selected. The date range is applied to determine which customers made any purchase within the date range. This is different than the Lifetime Number of Orders on the Dashboard, which takes lifetime orders up to the ending date of the date range as it compares data year over year and this is a more beneficial context for that data.

Common questions about CLV 

Question: How can I view specific group’s CLV?
Answer: Use the segment selector at the top of the page to filter data using segments you've built with the Segment Builder.

Question: How does WhatCounts calculate the average: median or mean?
Answer: The CLV is calculated using mean. 

Question: Is it possible for CLV to go down or stay the same between purchases?
Answer: In certain circumstances – usually based on coupon usage or returns – the CLV could drop. It's not very common but does happen from time to time. 

Question: Can you give me an example of how I can analyze/use CLV data? 
Answer: Here are two examples of how you can use CLV:

  1. Look for large jumps in the data. Often you can find which purchases are escalation points for your customer base and build automations that respond to those inflections. This is a great way to target your Best Customers or identify products to promote to first time purchasers.
  2. Filter by segment – especially product-based segments – and compare the segment CLV to your overall CLV. This can be especially helpful when trying to analyze how a specific product is contributing to your overall customer lifetime value.
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