Customer lifetime value (CLV) is a metric to determine a company's total expected income from a client till the client account is active. The longer a client account stays active, the higher the customer's lifetime value from it. It is one of the metrics used to measure a company's growth.
Suppose a company makes average sales of $80. A client makes two purchases every two years. The LTV will be $80 x 2 x 2 = $320. Suppose, in this case, the profit margin is 10%. Thus, the CLV is $80 x 4 x 2 x 10% = $32.The LTV figure will help the business know the future cash flows and the client base it will need to achieve profitability.