Understanding Customer Equity and CLV

“Alright, here’s Customer Lifetime Value in the quickest way possible.

CLV is basically how much profit one customer brings your company over their entire relationship

with you — but calculated in today’s dollars. Simple. Now if you take the CLV of every

customer — current, past, and even potential future customers — and add them up,

you get Customer Equity. That’s the total value of your customer base.

BUT important: Customer Equity isn’t the whole value of a company. A company also has

physical assets, intellectual property, and research and development that add to its worth.

Now, Customer Equity has three parts: Value Equity — how good the product