Executive Summary This How-To Guide details the definition of customer lifetime value (CLV), the advantages of calculating CLV and the standard formula for calculating CLV. Common sense tells us that the longer a customer is in relationship with a company, the more profitable that customer relationship is. However, many companies put the emphasis on new customer acquisition and not enough effort is made to retain existing customers. This is a mistake, because the financial impact of retaining customers is substantial: companies can increase profits by as much as 100% by retaining just 5% more of their customers. For these reasons, CLV is a crucial metric that most organizations overlook mainly because its definition and purpose are not entirely known. Understanding the monetary value each customer represents to your organization can help you budget correctly for your business needs, strategically plan your marketing initiatives and improve long-term relationships with your customer base. Read this brief 4-page guide to learn about: Customer Lifetime Value The advantages of calculating CLV The standard formula for calculting CLV Use the Customer Lifetime Value Calculator to get started! Demand Metric's How-To Guides are designed to provide practical, on-the-job training and education and provide context for using our premium tools & templates. If there is a topic that you would like to see covered, please contact us at email@example.com (link sends e-mail) to make a content request.