Your business has customers, but they're not all created equally. 
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Some customers might purchase one product or service and leave. Others become loyal supporters and purchase many products or repeat service purchases over the course of a year, or two, or more. Which customer is then more valuable to you? 

Obviously the second group, but you need to be measuring lifetime value to know that. You need to know if the audience you are attracting is increasing or decreasing this value for your business. The way to measure it is known as your CLV, or Customer Lifetime Value. Knowing the CLV for different customers will greatly help you with business decision-making and business profitability.

Using the CLV metric, you can also determine, among other things:

• What products/services are in demand by customers with the highest CLV.
• Which products/services have the highest profitability index.
• Who your most profitable types of clients are.
• Which customer relationships are driving more than 80% of your sales.
• How much you can afford to invest in acquiring similar customers with a good profit margin.
• The exact amount you forecast an average customer will be likely to purchase over time.
• How you can understand the likes, desires and reasons your most loyal customers purchase from you.