What is customer lifetime value (CLV)?

Customer lifetime value (CLV) is the total amount a customer spends with your store over the whole time they keep buying from you.

How to estimate it

A simple version that works for most small stores is:

CLV = average order value × average number of orders per customer

Some versions multiply by gross margin to get lifetime profit instead of lifetime revenue, or forecast future orders. Start simple.

WooCommerce has no lifetime value report. The Customers report (WooCommerce › Customers) lists each customer's orders, total spend and average order value, and you can export it with the Download button. Divide total spend across all customers by the number of customers for an average spend to date. Keep in mind that recent customers haven't had time to buy again, so the figure grows as your store ages.

A worked example

Say your Customers export shows 1,000 customers who together spent $90,000 across 1,500 orders.

• Average order value: $90,000 ÷ 1,500 = $60
• Orders per customer: 1,500 ÷ 1,000 = 1.5
• CLV (so far): $60 × 1.5 = $90

If your gross margin is 50%, each customer is worth about $45 in gross profit to date.

Why it matters

CLV tells you how much you can afford to spend to win a customer. If it costs $40 in ads to get a first order but customers are worth $45 in profit over time, you're barely ahead. Raising repeat purchase rate is usually the fastest way to lift it. Askshelf's customer retention lookup gives your store's average lifetime spend (revenue, not profit), but it can't work out lifetime value for individual customers. The guide on calculating customer lifetime value goes step by step, and WooCommerce customer analytics covers the wider picture.