Week 5

 Customer Lifetime Value (CLV)

Customer Lifetime Value or CLV is a metric that estimates the total value a customer brings to a business over their entire relationship.

It takes into account factors like how much the customer spends, how often they make purchases, and how long they stay with the company. CLV helps businesses make decisions about customer acquisition and retention. For example, a streaming service calculates CLV to understand how much revenue a customer will generate over time and then tailors their marketing strategies accordingly.

Netflix over the entire time they use the service. It considers factors like how much they pay each month, how often they watch shows and movies, and how long they stay subscribed. CLV helps Netflix decide how to keep customers happy and attract new ones. For example, if someone has been a subscriber for a long time and watches a lot of content, their CLV is higher, so Netflix may offer them personalized recommendations or exclusive shows.