From the course: WordPress: Ecommerce
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Understanding customer lifetime value - WordPress Tutorial
From the course: WordPress: Ecommerce
Understanding customer lifetime value
- [Instructor] Once you start getting customers, you'll want to focus on CLV, or customer lifetime value. The CLV is an estimate for how much revenue you'll be able to make from each customer. To have a profitable business, you want to lower your cost of acquisition and increase your customer lifetime value. So if your cost of acquisition is higher than your customer lifetime value, you'll eventually go out of business. So make sure to keep the acquisition costs low and the lifetime value high. Some store owners, when they're planning a new e-commerce venture, will look at the acquisition costs and determine if they can have a high enough lifetime value to make the business work. To find this target CLV number, we first need to start with our acquisition cost. The cost of acquisition is calculated by multiplying the cost per visit by your conversion rate. Let's say you're selling a chocolate-flavored protein bar, and you've decided that advertising is the best way to get your business…
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