Customer lifetime value (CLV) is the total amount a customer is expected to spend with a business over the whole relationship, not just the first purchase. Repeat purchases and brand loyalty raise it. Two customers can cost the same amount to win and still be worth very different amounts: one buys once and leaves, and the other keeps coming back for years.

Marketing lessons sometimes shorten lifetime value to LTV. On a mortgage, LTV means loan-to-value, which is a different number.

Compare lifetime value with customer acquisition cost. Winning the customer pays off when the spending over time is higher than the cost to acquire them.

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• Click Here for our lesson on Foundations of Marketing
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• Click Here for our lesson on What Is the Product Life Cycle?
• Click Here for our lesson on Consumer Psychology and Persuasion in Marketing