The customer lifetime value is an indicator which presents an estimate of the total revenue a customer will generate for a company during the customer's lifetime. The CLTV is useful for prioritizing the most profitable customer, optimizing acquisition budgets and improving marketing strategy to build loyalty. CLTV is displayed in the contact's profile (in the E-COMMERCE section) for each contact who made transactions. 
Required plan: Grow or Boost |
Requirements
For data on the customer lifetime value to be generated in your project, you must have an E-commerce structure and transaction data. For data to be displayed in a contact's profile, that contact must have made at least one transaction in order to calculate the average transaction value and the buying frequency.
CLTV Calculation
CLTV is calculated with the following formula:
Average transaction value × Buying frequency × Customer lifetime
Average transaction value: Total of the revenue generated by a customer divided by the number of transactions. Buying frequency: Number of transactions over a period of one year.
Customer lifetime: Average period for which a customer stays active with the business. |
CLTV is recalculated every 24 hours.
Customer Lifetime Configuration
By default, the calculation for the customer lifetime for every contact in the project is 4 years. You can modify the default configuration if it doesn't correspond to the behavior you have observed with your clients.
Go to Data Management → E-commerce, and in the Configuration section, you can edit the default lifetime:
Segmentation
In the Groups, Persona and Scoring tools, you can use the following indicators as targeting criteria:
- Customer Lifetime Value (Estimated amount of a contact throughout that contact's lifetime)
- Past Spending Over Customer Lifetime (Real spent amount over the lifetime)
- Estimated Future Spending (Future estimated total amount - Spent Amount to this day)
To use these indicators, drag a criterion of E-commerce indicator type and select in the field list: