GLOSSARY

Customer lifetime value.

Customer lifetime value estimates the value a customer contributes across the relationship.

Why it matters

Use a defined time horizon and cohort evidence. A contribution-based measure is more useful for acquisition decisions than adding up revenue without the cost of serving those orders.

Compare cohort contribution over time with the cost of acquiring that cohort.

Put it in context

Use this concept alongside the relevant customer journey, business costs and measurement assumptions. A single metric rarely tells the whole story.

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