Customer lifetime value (CLV) represents the total estimated amount a customer is expected to spend on products or services over their lifetime. To estimate CLV, customers must be assigned a specific value based on average purchase values and frequency rates, then multiplied by the average customer lifespan. CLV helps forecast future revenues, target valuable customers with sales and marketing efforts, identify most valuable customers for loyalty initiatives, predict which types of customers will be most valuable over time, inform overall marketing strategy and budget, and turn low-CLV customers into high-CLV ones by encouraging increased spending. Research suggests that a good CLV should be at least three times greater than customer acquisition costs (CAC), indicating healthier businesses with loyal subscribers or frequent buyers over long periods of time.