Glossary Term
Customer Lifetime Value (CLV)
Definition
Customer Lifetime Value (CLV) is a metric that represents the total revenue a company can expect to earn from a customer throughout their entire relationship. In the MedTech industry, CLV considers recurring revenue from consumables, service agreements, and future product upgrades in addition to the initial purchase of a device or solution.
Relevance to the MedTech Industry
CLV helps MedTech companies assess the long-term profitability of their customer relationships. By understanding CLV, companies can make informed decisions about marketing investments, customer acquisition strategies, and service models, ensuring that acquisition and retention efforts are cost-effective and sustainable.
Additional Information & Related Terms
Cost of Customer Acquisition (CAC) Works alongside CLV to evaluate the return on investment in acquiring customers.
Upselling A strategy to increase CLV by offering premium or additional products and services.
Cross-Selling Enhances CLV by encouraging customers to purchase complementary products or services.
Recurring Revenue Model A business model designed to maximize CLV through repeat purchases or subscriptions.