In context
The simplest formula is AOV × purchase frequency × gross margin × expected lifespan. The number itself matters less than its movement: a CLV climbing quarter-over-quarter is the sign of a healthy brand, regardless of acquisition cost.
Most stores anchor on CAC (cost to acquire) as the primary input — but CAC is only meaningful relative to CLV. A $40 CAC is brilliant on a $400 CLV product and ruinous on a $50 CLV product. The right LTV:CAC ratio target is typically 3:1 or better.
How Zubby uses this
Zubby models CLV for every shopper based on first-order signals (basket size, time-to-purchase, return rate) and updates the estimate as new orders land. We use CLV to prioritize winback campaigns, VIP recognition, and the order in which the agent offers escalation paths — high-CLV shoppers get richer experiences and faster human handoff.
On the merchant dashboard we surface CLV cohorts so you can see which acquisition channels build long-term value vs. one-shot revenue.