Customer Lifetime Value (CLV) is a metric that estimates the total revenue a business can expect from a single customer throughout their relationship. By understanding CLV, companies can make informed decisions about how much to invest in acquiring and retaining customers. This helps businesses focus on long-term growth rather than just short-term sales. Calculating CLV involves considering factors like average purchase value, purchase frequency, and customer retention rate. For example, if a customer regularly buys products from a store and remains loyal for several years, their CLV can guide the store in creating effective marketing strategies and improving customer service.