Glossary of Mobile Advertising Terms
CLV - short for customer lifetime value (also known as lifetime value - LTV, or lifetime customer value -LCV) is a total amount of money made by the company during their entire relationship with a customer. It’s used to predict how much profit can a customer generate but it’s also useful in finding out strategies to attract new customers.
CLV is an important metric since it encourages companies to pay attention to the long-term health of their customer relationship, rather than just focusing on the quarterly profits. Businesses should focus on CLV to be their primary metric in calculating the success of their campaigns.
CLV can also have several other uses. Since you can identify your most valued customers with CLV, you can use that knowledge to improve your customer support and service. CLV can also help with your marketing efforts and your relevance with personalized messaging.
When calculating the CLV, there are two primary measures to be aware of - the predictive CLV and historic CLV. Predictive CLV is an estimate of how much income will a customer generate during their relationship with a business. Historic CLV is the total amount of money from all customer’s past purchases during a specific time period.
A great practical way of understanding this would be to check out our App Revenue Calculator, which calculates how much revenue an app can generator based on many metrics - CLV being one of them.