What is CLV?
Customer Lifetime Value (CLV) estimates the total revenue a customer generates over the course of their relationship with your business. It combines three inputs: average order value, purchase frequency and customer lifespan. You can build CLV in the Metric Builder, combining these inputs into a single metric using data from your own customers.
Why build your own CLV metric?
CLV shows which customers are worth the most to your business, not just which orders bring in the most revenue at any one time. Purchase frequency and customer lifespan differ between businesses, and you know these numbers for your own customers better than anyone else. Building the metric yourself means it reflects how your customers actually behave.
CLV calculation
CLV: Average Order Value × Purchase Frequency × Customer Lifespan
Average order value: the average revenue per order, already available from your data in Billy Grace.
Purchase frequency: how often a customer buys within a given period.
Customer lifespan: how long a customer keeps buying from you, usually measured in years or months.
Setting up CLV in the Metric Builder
Open the Metric Builder and create a new metric using the formula above. Select Average order value, then enter Purchase frequency and Customer lifespan. The Metric Builder combines all three into a single CLV number that reflects your own customers rather than a generic benchmark.
Read this article to find all details on how our Metric Builder works.
Good to know
CLV works best when customers buy often enough to give you a reliable average. If your purchase cycle is long or irregular, think annual contracts or large one-off purchases, treat the number as a directional guide rather than an exact figure and revisit it as more data comes in.
Once your metric is set up, use it to see which customers are worth investing more in before you decide what to spend acquiring the next one. It gives you a clearer basis for where to put budget than looking at single-order revenue alone.