CLV / LTV (Customer Lifetime Value)
Detailed Explanation
CLV measures the total revenue a customer will generate for your company over their entire relationship. When used together with CAC, this metric plays a critical role in profitability analysis. A healthy SaaS business maintains a CLV:CAC ratio of at least 3:1.
Example
Average subscription €50/month, average customer lifetime 24 months → CLV = €50 × 24 = €1,200 total value per customer.
Why CLV Matters
CLV helps you understand how much you can afford to spend on customer acquisition. If your CLV is €1,200 and you're spending €400 on CAC (3:1 ratio), you're in healthy territory. Improving CLV through upsells, cross-sells, and reducing churn directly impacts profitability.
CLV / LTV in B2B outbound
CLV decides how much effort each prospect deserves. A segment with a high lifetime value justifies smaller, hand-checked lists, research on every account and a sequence that reaches the same person by email and on LinkedIn. A low-value segment needs a cheaper motion with broader lists and fewer touches.