What is Customer Lifetime Value (CLV)?

• A. The total revenue a business can expect from a single customer over their lifetime.
• B. The profit from a single transaction.
• C. The number of customers acquired in a year.
• D. The average duration of a sales cycle.

Answer: (A)

Customer Lifetime Value is the total revenue a business can expect to earn from a single customer over the entire duration of their relationship. This is the best answer because CLV reflects the long-term value a customer brings, combining how much they spend per interaction, how often they buy, and how long they stay with the brand. This perspective informs how much to invest in acquiring and retaining customers, since the payoff is realized over the customer's entire lifetime rather than from one transaction. It’s distinct from short-term profit on a single sale, a metric about how many customers you gain in a year, or the time it takes to move a sale through the process.