Customer Lifetime Value: Or, Why I No Longer Panic Every Time I Run an Ad

Let me tell you a small business truth that no one warned me about.

Sometimes, you do everything right: the Canva graphics, the clever caption, and the little bit of ad budget you managed to free up by eating leftovers all week, and still, you get... silence. Maybe one like from your aunt. Maybe one click that doesn’t convert. And suddenly you’re wondering if you’ve just lit your last €50 on fire.

Enter the one number that saved me from that spiral: Customer Lifetime Value.

It’s not sexy. It’s not viral. But it’s what finally made marketing feel less like chaos and more like a choice. And I think it’s the one metric every small business owner should have tucked in their back pocket.

So what is Customer Lifetime Value?

Customer Lifetime Value (or CLV, if we’re pretending to be cool) is how much money a customer brings into your business over the entire time they’re with you.

Not just the first sale. Not even the first few months. I’m talking long game.

Think of it like dating. If someone takes you out for one nice dinner and ghosts you? That’s a €40 kind of customer. But if they keep showing up, remember your coffee order, and still want to hang out three years later? That’s a €2,000 customer. And you treat those two very differently.

Why does this matter when you’re just trying to get through the week?

Because small business marketing feels expensive when you don’t know what a customer is worth.

If I told you to spend €100 to get a new client, you might panic. But what if I told you that the client will bring in €900 over the next year? Now we’re having a different conversation.

Customer Lifetime Value gives you context. It helps you:

• Stop undercharging out of fear

• Understand which customers are genuinely worth your time

• Justify a few bold moves (like running an ad or offering a discount)

• Spend less time chasing everyone, and more time keeping the right ones around

It’s like someone finally handed you a map instead of yelling, “just keep going,” from a moving vehicle.

How do you figure out your Customer Lifetime Value?

You don’t need spreadsheets. You just need a calculator, a cup of coffee, and some honesty.

Here’s the quick version of the formula:

CLV = Average Order Value × Purchase Frequency × Customer Lifespan

Let’s use an example that’s not about tech bros or big agencies.

Imagine you’re a dog groomer. You charge €45 per visit. Your regulars come every 6 weeks, which is about 8 times a year. Most stay with you for 2 years.

That’s: €45 × 8 × 2 = €720

Which means your average loyal customer is worth €720. Suddenly, offering a €20 first-time discount to get someone through the door feels a lot less terrifying.

But what if you’re a one-off kind of business?

You can still use Customer Lifetime Value, and you can still grow it.

Let’s say you’re a wedding photographer. Maybe you only work with someone once. But if they love you, they might:

• Refer their cousin

• Book you for maternity photos

• Come back for family portraits next year

You can’t guarantee it, but you can start thinking that way. If your CLV could go from €1,200 to €2,400 just by nurturing the relationship, then it makes sense to keep in touch, send a thoughtful follow-up, or create an offer for repeat clients.

What do you do with your CLV once you have it?

Here’s the part that matters. Once you know your Customer Lifetime Value, you can:

• Decide how much you’re comfortable spending on marketing (without guilt)

• Focus on the customers who are actually profitable, not just the loudest

• Improve your onboarding and follow-ups because retention is now money, not just “good vibes”

• Stop panicking every time a post doesn’t go viral, because you’re playing the long game

I didn’t know my own Customer Lifetime Value until embarrassingly recently. Once I worked it out, I completely changed how I priced and promoted my strategy sessions. It gave me permission to stop hustling for every click and start designing my offers around the kind of clients I actually wanted more of.

It’s not about squeezing every cent out of your customers. It’s about understanding what each relationship is worth so you can run your business like the confident genius you are, not like someone Googling “how to make sales fast” at 1 am.

One last thing

If this still feels like a lot, start with three customers you’ve loved working with. Go through their purchase history, make a rough estimate of their Customer Lifetime Value, and ask yourself: “What would my business look like if I had ten more of them?”

That’s your goal. Not more followers. Not more chaos. Just more of the right people.

On Friday, I’ll be sharing a free Customer Lifetime Value Cheat Sheet to help you calculate your CLV and use it to make better marketing decisions. It’s simple, clear, and honestly kind of fun.

So, make sure to sign up for the newsletter to receive the cheat sheet directly in your inbox on Friday!