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Actually, In the yearly growth of company we evaluate the value of customers .
In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. The prediction model can have varying levels of sophistication and accuracy, ranging from a crude heuristic to the use of complex predictive analytics techniques.
Customer lifetime value (CLV) can also be defined as the dollar value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. Customer lifetime value is an important concept in that it encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. Customer lifetime value is an important number because it represents an upper limit on spending to acquire new customers.
The Customer Lifetime Value (CLV) is the monetary value representing the average revenue generated from the relationship with the customer over a period of time. Some may use profit—i.e., net value—in lieu of revenue to compute CLV. In layman's words, CLV is how much a customer relationship is worth. I've provided below2 interesting links from Wikipedia and the Harvard University. Note: CLV is generally the average amount of money spent by the customer during his/her relationship with the company. But the formula—from a pragmatic standpoint—may include also the indirect revenue generated by the company from third-parties—e.g., customer's information sold to another company as part of a lead generation program, revenue from customer referrals. —Pascal
