Unf*cking Your CX #39: Stop Faking It—CLV Is the Only North Star That Matters

Let’s face it—most brands are faking it when it comes to Customer Lifetime Value (CLV). They talk about loyalty and relationships, but what they really focus on are flashy metrics that make quarterly earnings look good.

Here’s the truth: If you’re still treating CLV as an afterthought—or worse, ignoring it entirely—you’re already falling behind.

CLV isn’t just a number. It’s the ultimate measure of how well you’re meeting customer expectations, delivering value, and creating experiences that make them want to stick around.

What Is CLV—and Why Does It Matter?

At its core, Customer Lifetime Value (CLV) is the total value a customer brings to your business over their relationship with you. It’s not just about dollars spent; it’s about loyalty, advocacy, and the trust you build along the way.

Here’s the classic formula for calculating CLV:

CLV = (Average Purchase Value × Purchase Frequency × Customer Lifespan)

But let’s take it a step further. CLV is also “the sum of your customer’s loyalty through met expectations, great experiences, and genuine appreciation for who they are.”

How to Measure CLV

While the formula seems simple, measuring CLV isn’t. Most brands mess this up for two reasons:

1. They Overcomplicate It: They throw in every possible variable, from weather data to customer birthdays, without understanding what actually drives the number.
2. They Don’t Like the Results: When the number doesn’t align with their aspirations, they massage the data or focus on vanity metrics instead.

To measure CLV effectively:

• Start with the Basics: Use the traditional formula but validate it with real behavioral data (repeat purchases, retention rates, etc.).
• Break It Down by Segment: Don’t treat all customers the same. High-value segments deserve a more tailored approach.
• Track Lead Measures: Focus on the actions that build CLV over time, like improving post-purchase communication and reducing friction.

Lead Measures That Build CLV

Too many brands focus only on lag measures like total revenue or churn rates. Here are the lead measures that actually drive CLV:

1. Retention Rates: The longer customers stay, the more they spend. Retention is the backbone of CLV.
2. Repeat Purchases: Are customers coming back? Track purchase frequency to spot friction points in the journey.
3. Advocacy Metrics: Referrals and word-of-mouth are the holy grail of organic growth.
4. Post-Purchase Experience (PPX) Engagement: Communication, support, and seamless returns build trust and repeat business.
5. Customer Effort Scores (CES): The less effort customers need to solve problems, the more likely they are to stick around.

Why Brands Struggle with CLV

Here’s the ugly truth: most brands don’t like their CLV numbers, so they avoid them.

Instead, they focus on short-term wins like acquisition campaigns or inflated NPS scores. Here’s why this mindset is a disaster:

1. Transactional Thinking: Treating PPX as a series of tasks (delivery, returns) instead of opportunities to deepen relationships.
2. Vanity Over Value: Obsessing over metrics that look good in presentations but don’t drive long-term growth.
3. Ignoring Churn: Brands often fail to address churn because it forces them to confront hard truths about their experience gaps.

Alternate Definitions

• Customer Lifetime Value: The sum of your customer’s loyalty through met expectations, good experiences, and genuine appreciation for who they are as a customer.
• Customer Churn: The cost of neglect. It’s the measure of how often and how quickly customers decide you’re no longer worth their time or money.

How Brands Are F*cking Up CLV

If you’re making any of these mistakes, you’re sabotaging your CLV:

1. PPX as Transactional: Treating the post-purchase experience as a cost center instead of a loyalty builder.
2. Short-Term Thinking: Prioritizing acquisition over retention.
3. No Emotional Connection: Focusing solely on transactions and ignoring emotional touchpoints.
4. Siloed Metrics: Failing to align CLV goals across departments, from Ops to Marketing.

Connecting CX and CLV: A Step-by-Step Guide

1. Map Customer Pain Points to Business Metrics - Example: “Delayed onboarding is causing a 15% churn rate, costing $1M annually.”
2. Showcase Financial Impact - Use hard numbers to demonstrate how solving pain points drives measurable results. Example: “Improving onboarding can save $500K in churn costs.”
3. Tie CX Actions to Strategic Goals - Align your initiatives with company-wide priorities like increasing revenue, reducing operational costs, or boosting retention.

3 Player Tips for Elevating CLV

1. Ditch Dashboards, Deliver Decisions

• Don’t just present metrics—provide actionable insights that tie directly to outcomes.
• Example: “Instead of just reporting a 20% churn rate, show how proactive communication can cut it in half.”

2. Champion the PPX

• Treat every post-purchase interaction as a moment to build loyalty, not just complete a transaction.
• Actionable Move: Implement dynamic delivery updates to reduce WISMO calls and increase trust.

3. Quantify Cost of Inaction

• Advocacy requires urgency. Calculate the financial impact of neglecting key CX improvements.
• Example: “Each WISMO call costs $10. Fixing this issue saves $200K annually.”

2 Frameworks for Driving CLV

Framework #1: The CLV Growth Loop

1. Input: Customer feedback, retention data, and behavioral insights.
2. Action: Proactively address friction points (e.g., onboarding, post-purchase).
3. Outcome: Increased CLV through higher retention, advocacy, and repeat purchases.
4. Repeat: Use real-time insights to continuously iterate.

Framework #2: The Advocacy Flywheel

1. Customer Feedback → Gather insights from surveys, reviews, and complaints.
2. Business Action → Prioritize initiatives that drive measurable outcomes.
3. Impact Measurement → Tie every action to financial results.
4. Advocacy Expansion → Scale what works across departments.

Thought-Provoking Question: Is your CX strategy focused on keeping customers happy for the next purchase—or for the next decade?

Conclusion: CLV Isn’t the Future—It’s the F*cking Present

Let’s cut the fluff: CLV isn’t some “future-proofing” strategy—it’s the here and now. If you’re still clinging to vanity metrics like NPS or obsessing over short-term wins, you’ve already lost.

The brands that will dominate aren’t the ones playing it safe—they’re the ones doubling down on what matters. CLV isn’t a nice-to-have—it’s your North Star. It’s the difference between a brand that survives the next quarter and one that thrives for decades.

Here’s the bottom line: every decision you make should scream CLV. Anything less? You’re selling out your customers, your credibility, and your future.