Why is CLV Important?
Customer Lifetime Value (CLV) is the cornerstone of unit economics. If you know exactly how much profit a single customer will bring you over their lifetime, you know exactly how much you can afford to spend on marketing to acquire them (CAC - Customer Acquisition Cost).
Business Rule of Thumb: A healthy business should maintain an LTV to CAC ratio of at least 3:1. That means for every ₹1 you spend on marketing, the customer should generate ₹3 in lifetime gross profit.