# Customer Lifetime Value (CLV)

**What is it:** An estimate of how much revenue you can expect to earn from a subscriber over the entire duration of their subscription.

**Why it matters:** CLV helps you understand the long-term value of each subscriber. It’s a key metric for evaluating pricing strategies, forecasting revenue, and deciding how much to invest in acquiring or retaining users.

**How is it calculated:**\
We multiply your average monthly revenue per active subscriber (ARPU) by how long, on average, subscribers stay subscribed (Retention Period).

* Average Revenue per User (*ARPU) is calculated as Total Revenue from Active Subscriptions divided by the Number of Active Subscriptions.*
* Average Retention Period is calculated as described [here](https://plugin-pulse.gitbook.io/docs/financial-metrics/avg.-retention-period).


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