What it measures
CLV estimates the gross value a typical customer may contribute over the relationship.
Your result—
This is a simple gross-margin CLV model. Churn, discounting, servicing costs and changing customer behaviour are not modelled.
How customer lifetime value works
Formula
CLV = average order value × purchases per year × customer lifespan × gross margin.
Use the result
Compare the metric over time or between campaigns using the same measurement basis.