The total revenue an agency can expect from a client relationship over its entire duration.
The total revenue an agency can expect from a client relationship over its entire duration.
Client Lifetime Value calculates the total worth of a client relationship from start to finish. It combines average contract value, relationship duration, and any additional revenue from upsells or referrals. CLV helps agencies understand which clients to prioritize and how much to invest in acquisition.
Understanding CLV changes how agencies approach client relationships. If a client's CLV is $50,000, investing $500 in retention efforts is clearly worthwhile. Agencies should track CLV by client type, industry, and acquisition source to optimize their business development.
Monthly retainer: $5,000. Average relationship: 24 months. Upsells: $10,000 over lifetime. CLV = ($5,000 × 24) + $10,000 = $130,000
Angelwood helps extend client relationships and identify expansion opportunities, directly increasing lifetime value.
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The percentage of recurring revenue retained from existing clients, including expansions, contractions, and churn.
The percentage of clients an agency keeps over a specific period, typically measured annually.
A contract where clients pay a recurring fee for ongoing services, typically monthly, rather than per-project.