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Customer lifetime value (CLV) measures how much your average customer spends over the course of their relationship with you.
There are a number of methods you can use to calculate CLV. A simple method is to take the average amount your customers spend per transaction, multiply by the number of transactions per year, and multiply by the average number of years you retain a customer.
CLV = (Average order value) * (Number of orders/year) * (Average years/customer)