Customer Lifetime Value (CLV) is a metric that estimates the total revenue a business can expect from a customer throughout their entire relationship. It helps companies understand how much they should invest in acquiring and retaining customers. By analyzing factors like purchase frequency and average order value, businesses can make informed decisions about marketing strategies and customer service. Calculating CLV involves considering the average lifespan of a customer, their spending habits, and the costs associated with serving them. This information allows companies to identify their most valuable customers and tailor their efforts to enhance customer satisfaction and loyalty, ultimately driving profitability.