The Holy Grail of Customer Metrics

Customer Lifetime Value or CLV...

This is the predictive value of a customer over their lifetime as a customer.

We can predict a baseline or go granular, working our way back from the age someone is based on their total lifetime left to live (creepy, I know).

I personally like storing a baseline value and doing updates over time to a complete dataset.

Why should you care about CLV?

I think it's a good way to gauge your current spend of marketing budget with context to your TAM (Total Addressable Market). And set it to a healthy level if you're in acquisition focus in the business.

When you hear me banging on about 'maximising opportunity', knowing how hard you can put your foot on the gas is what I'm really referring to.

How would I do it if I were a lay like you?

I would try and calculate it in a spreadsheet and then go on and do some analysis there and start setting a budget from that (but please, know your bloody TAM, 90% of people who call me for help don't bloody focus enough on their TAM).

Extending on this storing a custom field in your CRM/ECRM to segment is super handy, you want to target your best potential customers with clear offers of value in a blue ocean.

Get out of your head and into the data and the customer's brain and go make some sales.

Share this page on Twitter · Back to the blog


Did You Enjoy This?

Then consider joining the other professional services experts getting the newsletter. It's a provocative look into marketing and getting clients.