{"id":19668,"date":"2019-07-31T00:00:00","date_gmt":"2019-07-31T07:00:00","guid":{"rendered":"https:\/\/www.helpshift.com\/glossary-term\/lifetime-value\/"},"modified":"2023-11-02T12:30:39","modified_gmt":"2023-11-02T19:30:39","slug":"lifetime-value","status":"publish","type":"glossary","link":"https:\/\/www.helpshift.com\/glossary\/lifetime-value\/","title":{"rendered":"Lifetime Value"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.helpshift.com\/glossary\/lifetime-value\/#Why_Does_Lifetime_Value_Matter_in_Customer_Service\" title=\"Why Does Lifetime Value Matter in Customer Service?\">Why Does Lifetime Value Matter in Customer Service?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.helpshift.com\/glossary\/lifetime-value\/#How_Helpshift_Supports_Lifetime_Value\" title=\"How Helpshift Supports Lifetime Value\">How Helpshift Supports Lifetime Value<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.helpshift.com\/glossary\/lifetime-value\/#Additional_Information_About_Lifetime_Value\" title=\"Additional Information About Lifetime Value\">Additional Information About Lifetime Value<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"has-text-align-left\">Lifetime value is a term often used in marketing to describe the ROI (return on investment) an organization gets from a customer over the lifetime of that customer\u2019s relationship with the company \u2014 the net profit the entire relationship will accrue. While it can be hard to derive, lifetime value is an important metric because acquiring new customers is expensive. The ability to weigh the acquisition cost against the lifetime value puts that initial cost in perspective and helps justify marketing and other types of expenditures and campaigns.<\/p>\n\n\n\n<p class=\"has-text-align-left\"><em>Harvard Business Review<\/em> <a href=\"https:\/\/hbr.org\/2014\/07\/how-valuable-are-your-customers\" target=\"_blank\" rel=\"noopener\">defines lifetime value as<\/a> \u201cThe amount of profit your company can expect to generate from a customer, for the time the person (or company) remains a customer (e.g., x number of years).\u201d It seems like a simple formula, but it can be a challenging one to track, even if it\u2019s often referred to as one of the most <em>important <\/em>metrics to track.<\/p>\n\n\n\n<p>You can begin to assess the metric of customer lifetime value using a few parameters such as:<\/p>\n\n\n\n<ul><li>Average number of purchases per year<\/li><li>Average spend per purchase<\/li><li>Average discount rate<\/li><li>Average gross margin on those purchases<\/li><li>Direct marketing costs per customer per year<\/li><li>Average customer retention rate<\/li><\/ul>\n\n\n\n<p>Note that lifetime value is also referred to as customer lifetime value (or CLV) and lifetime customer value.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.helpshift.com\/wp-content\/uploads\/2022\/04\/customer-lifetime-value.png\" alt=\"\" class=\"wp-image-5704\" width=\"704\" height=\"422\"\/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Does_Lifetime_Value_Matter_in_Customer_Service\"><\/span><strong>Why Does Lifetime Value Matter in Customer Service?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-text-align-left\">Knowing customer lifetime value can help you segment your customers by their worth. By assessing this metric, you might figure out that customers who are making more purchases, but in smaller amounts, are more or less valuable to you than customers making fewer large purchases, for instance.<\/p>\n\n\n\n<p class=\"has-text-align-left\">If you know that a certain group of customers are worth more to your company in the long run, these customers can be flagged for expedited support. Customers who are likely to renew a contract or continue a subscription, for instance, would receive quicker support than those who have made single purchases and are unlikely to reinvest.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Helpshift_Supports_Lifetime_Value\"><\/span><strong>How Helpshift Supports<\/strong> <strong>Lifetime Value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The customer support solutions Helpshift provides can promote a higher average lifetime value by engaging customers more thoroughly and retaining them more frequently.&nbsp;<\/p>\n\n\n\n<p>With Helpshift, you can also leverage automation in order to route inquiries according to factors like customer lifetime value. Customers with lower lifetime value ratings would be routed more frequently to automated self-serve options, while high-lifetime-value customers would more frequently reach live agents for personalized support.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Additional_Information_About_Lifetime_Value\"><\/span><strong>Additional Information About Lifetime Value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>Blog post:<a href=\"https:\/\/www.helpshift.com\/blog\/b2c-customer-service-experiences\/\"> B2C Brands Deliver Exceptional Customer Service Experiences with Helpshift<\/a><\/li><li>Blog post: <a href=\"https:\/\/www.helpshift.com\/blog\/b2b-versus-b2c-customer-service\/\">Top Considerations in B2B Versus B2C Customer Service<\/a><\/li><\/ul>\n","protected":false},"author":8,"featured_media":19669,"template":"","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"Uncategorized"}]},"featured_image_src_large":["https:\/\/www.helpshift.com\/wp-content\/uploads\/2022\/04\/customer-lifetime-value.png",881,530,false],"author_info":{"display_name":"Erik Ashby","author_link":"https:\/\/www.helpshift.com\/author\/erikhelpshift-com\/"},"comment_info":"","_links":{"self":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19668"}],"collection":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/users\/8"}],"version-history":[{"count":1,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19668\/revisions"}],"predecessor-version":[{"id":26401,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19668\/revisions\/26401"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/media\/19669"}],"wp:attachment":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/media?parent=19668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/categories?post=19668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}