Customer lifetime value (CLV) is a key metric that sales operations professionals use to determine the total revenue a business can expect from a single customer account over the entire course of their relationship. Unlike one-time sales amounts, CLV takes into account the potential for repeat business, referrals, expansion revenue, and other earnings from an individual customer over time.
As a sales ops pro, it’s your job to calculate CLV using data on average purchase amounts, purchase frequency rates, customer churn likelihood, and other quantitative factors. The goal is to estimate the net profit the company can bank on from each customer. Knowing the CLV helps sales teams determine how much to invest in acquiring and retaining various customer segments. Customers with higher CLV get more marketing, service, and account management attention. Sales ops will track CLV trends to see which customer profiles and behaviors drive the most lifetime value. This helps the sales strategy target the right customer bases and motivates sales behaviors that maximize long-term revenue per account.
In essence, CLV helps sales operations optimize around profitable relationships versus one-time sales. Understanding this metric empowers data-driven decisions to acquire and nurture the customers that will be the most valuable over time.
