Customer lifetime value (CTV) is the total revenue a customer generates for your business over the entirety of their relationship with it. It’s not just about that first purchase or install, but customers’ subsequent actions, potentially (and hopefully) covering years. To get an accurate, reliable figure, you need to measure this value across all the channels your business uses, and doing so can represent a real challenge. Happily, there are ways to get this vital information, so you can make better, smarter marketing decisions.
In This Article:
What CLV Measures
As a metric, customer lifetime value identifies the customers who stay, spend, and return, revealing their true value over time. It matters because it reveals the truth about your business, not just what’s happened today, but provides information that may cover years. It’s the best metric for long-term, profitable growth, giving clear information about the marketing strategies and channels that are delivering, and those that are possibly wasted.
Proper CLV should measure:
- Retention – a 5% increase in this metric can boost profits by up to 95%.
- Purchase frequency.
- Average order value.
- Acquisition quality – customers who use multiple channels tend to have a higher CLV.
Measuring CLV can be very tricky, and it’s easy to make mistakes, which can result in inaccurate data. These errors include measuring per device rather than per user, using too short measurement windows, and ignoring margin. Fragmented, messy data sources and failing to attribute long-term revenue back to its acquisition channel can also cause serious problems.
How to Measure CLV Across Channels
To measure customer lifetime value across channels, you need to start by defining the formula to use, which should include margin, churn, and retention windows. Next, choose the measurement window, such as six months, twelve months, or the complete lifecycle, and connect all data sources, like paid, owned, organic, and offline.
The hardest, but most important, part of the measuring CLV mission is resolving identity across platforms. Once this is done, long-term revenue needs to be traced back to its acquisition source to show which channels truly generate high-value customers. Finally, dashboards must be built to make it as easy as possible for your team to compare channels on a long-term basis.
Why You Need AppsFlyer to Properly Measure Cross-Channel CLV
Even following all the steps above doesn’t guarantee that you’ll get consistently accurate cross-channel CLV measurements you can rely on. But a digital caped crusader is waiting in the wings to solve your problems, in the form of industry-leading acquisition platform AppsFlyer. Here’s what it offers:
Unified and Privacy-Safe Identity Resolution
AppsFlyer makes it easy to connect user journeys covering all the channels and touchpoints they hit, across web, app, desktop, and CTV, without compromising on compliance. This solves the biggest CLV measurement challenge: fragmented identity.
True Cross-Channel Attribution
Rather than putting all the focus on the last touch before conversion, AppsFlyer connects web sessions, installs, app events, purchases, subscriptions, repeat orders, and offline conversions. As a result, you can clearly trace acquisition back to its original source.
Long-Term Revenue Measurement
Using AppsFlyer, you can track revenue over 30, 90, or 180 days, or the full lifecycle value, essential for CLV accuracy. This is especially important for e-commerce businesses, where repeat purchase cycles often vary.
Cross-Platform Analytics
AppsFlyer is one of the few solutions that can unify mobile web, mobile app, desktop web, CTV, paid media, owned channels, and offline events, giving you a single source of truth for CLV across all channels.
Predictive Analytics
Your business will benefit from AppsFlyer’s predictive models to estimate future CLV based on early signals like product views, session depth, early retention, and engagement patterns. This enables you to optimize campaigns even before you know the full CLV picture.
Cross-Channel CLV is a Vital Metric For Your Business
Most acquisition metrics only show short-term performance, but CLV reveals whether a customer becomes profitable over time, and the extent of this profitability. For your marketers, CLV is a North Star, showing the channels that bring in customers who buy repeatedly, purchase higher-margin products, and engage across a range of touchpoints. The metric also highlights the customers who stay subscribed for longer and even those who respond well to lifecycle marketing, making CLV the foundation of channel performance analysis.