And as my definition suggests, we can’t do that until we know the value-the customer lifetime value (CLV)-of each and every one of our customers. There are quite a few different models and equations out there that claim to be able to do precisely this. Some are mostly correct, some are a little bit correct, and some are wildly off the mark, but all of these various formulas agree on the point we’ve already touched on: a company’s total customer equity is calculated by adding up the CLV of all its individual customers.
