The customer is king - but Customer Lifetime Value (CLV) analysis is the queen!

What is a Customer Lifetime Value (CLV) analysis? How do I calculate the Customer Lifetime Value? Is Customer Lifetime Value a KPI? Why should I conduct a CLV analysis? These and other questions are answered here.

Customer Lifetime Value (CLV) - what is it?

The term CLV - customer value analysis in German - is composed of two metrics: the current and the potential customer value. The CLV thus describes a coverage amount that a person realises during his or her customer life.
Smart methods optimise the calculation of the CLV: Since many factors have to be estimated when calculating the CLV, smart methods or artificial intelligence are used to make the results more accurate and meaningful. Financial forecasts thus become more trustworthy and targeted marketing more effective.

Identify the most relevant customers directly and thus increase the company's profitability

For successful marketing, the value of an individual customer is an important indication of which relationships to pursue. The purpose of CLV is to assign a financial value to a customer. In doing so, customer lifetime value looks into the future and is an extremely helpful tool for decision-making and planning. As the trend is moving more and more towards a positive customer experience for existing customers, an analysis of customer value is of great importance for companies.

Creation of customer value profiles
Mapping a clear profile of customer preferences and desires with a monetisation of customer value. As well as the identification of "good" and "bad" customers.
CLV as a cost control instrument Definition and calculation of a customer value for better estimation of costs. CLV is thus an important tool for planning marketing expenditure.
Customer Retention & Acquisition The CLV can be used to answer the following question: How much is an existing customer worth to me and how much is a new customer worth to me?
CLV & Customer Relationship Calculating the CLV is the first step in optimising costs as well as a company's relationship with its customers. Customer relationships can be intensified in a selected manner.