What is Customer Lifetime Value (CLV)?

Customer Lifetime Value (CLV, also written LTV) is the total revenue you can expect from a single customer over the entire relationship. It reframes customers as long-term assets rather than one-time sales — and it's the number that tells you how much you can afford to spend acquiring and supporting them.

Why CLV matters

CLV anchors the big decisions: how much you can spend to acquire a customer (compared against CLV), how much support investment is justified, and which segments are worth the most. A business that knows its CLV can invest confidently in retention and support, because it knows the long-term payoff of keeping customers happy.

How to increase CLV

Two levers raise CLV: keep customers longer (reduce churn) and grow their value (expansion). Support drives both — resolving issues and proactively helping customers succeed extends their lifespan and makes them more likely to upgrade. Lower churn directly lengthens the lifespan in the formula, compounding CLV.

Formula

CLV = Average revenue per account × Average customer lifespan (or ARPA ÷ churn rate)

Example: At $50/month average revenue and 5% monthly churn, CLV ≈ $50 ÷ 0.05 = $1,000 per customer.

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A full breakdown of Intercom's pricing model →

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Questions about Customer Lifetime Value (CLV)

What's the difference between CLV and LTV?

None — they're two names for the same metric (customer lifetime value / lifetime value). Some teams reserve "LTV" for the revenue figure and "CLV" for a profit-based version, but the terms are used interchangeably.

How does churn affect CLV?

Directly and powerfully. Since lifespan is roughly 1 ÷ churn rate, halving churn roughly doubles the expected lifespan — and therefore CLV. It's why retention work has such outsized long-term payoff.

Related terms

Churn Rate

Churn rate is the percentage of customers (or revenue) you lose over a period. It's the inverse of retention and one of the most important health metrics for any subscription business — small differences in churn compound dramatically over time, so even a point or two matters.

Customer Retention Rate

Customer retention rate (CRR) is the percentage of existing customers you keep over a period, excluding any new ones you acquired. It's the inverse of churn and a direct measure of how well you hold onto the customers you already have — usually far cheaper than winning new ones.

Net Revenue Retention (NRR)

Net Revenue Retention (NRR) is the percentage of recurring revenue you retain from existing customers over a period, including expansion (upgrades) and net of contraction and churn. An NRR above 100% means your existing customers grow your revenue even before you add a single new one.

Browse the full customer support glossary →