What is Customer Lifetime Value (CLV)?

In some periods, you may need to enrich your daily routine analysis in order to make important decisions and make useful inferences. Customer Lifetime Value (CLV) is useful as a metric that allows you to understand the lifetime values ​​of users coming from different channels.

When you look at what you get in return for your advertising and time investments, you need to consider how the feedbacks are up to now, and in which channels you need to communicate more aggressively or calmly. At this point, CLV helps you understand which users are more valuable to your business by delivering performance across multiple sessions. On a cumulative basis, you can evaluate the return on your investment with the clarification of the value created for your business by CLV through the channels that you acquire certain types of users.

For example, if your goal is to achieve the highest sales, you can rank the users who bring you the most value numerically by both their returns and profitability. Let’s say you have users that you earn via email, come through social channels, and get organically, for their first visit to your site. It would be nice to see which channel the high profitability target group came from, wouldn’t it?

With this metric, which is easily accessible to Analytics users of all levels, without the need for tracking code, etc., it is possible to make important decisions in the most accurate way without requiring a major analysis process in the account.

Tip: If you manage a site that runs short-term campaigns, you can make your communication more effective in your next similar campaign by restricting the user to select the date range you’ve acquired!

The Pareto Principle says: often we can assume that users who generate 80% return actually make up 20%. When we determine where we earn this 20%, we can actually start taking big steps for 80% return. The most important metric to get the maximum value at minimum cost is Customer Lifetime Value in this case, remember! :)

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