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Glossary

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV, sometimes LTV) is the total revenue a single customer is expected to generate across the entire relationship with a brand. It's a core metric for any business that depends on repeat purchases.

In context

A simple revenue CLV estimate is average order value × purchases per customer per year × expected relationship in years. Match the time units: monthly purchase frequency needs a lifespan in months. For gross-profit CLV, multiply revenue CLV by the gross-margin fraction. State which definition you use; revenue and gross profit are different amounts.

Illustrative example: $50 per order × 4 orders per year × 3 years gives $600 revenue CLV. At a 40% gross margin that is $240 gross-profit CLV, before acquisition and other operating costs. Compare CAC with a consistently defined contribution or profit measure and consider how long it takes to recover that cost. A rising revenue CLV alone does not establish profitable growth, and there is no universal LTV:CAC ratio or payback period that fits every store.

How Zubby uses this

Zubby tracks realized value for every shopper as orders sync from your store: order count, total spend, and rolling 30- and 90-day spend. Those numbers drive VIP tiers and a daily churn-risk score that can enroll at-risk shoppers in a winback journey. It is measured history, not a predictive lifetime-value model.

The cohort retention view groups shoppers by the month of their first order and shows how many came back to buy again in each following month.

Shopper value and lifecycle in Zubby