What is Customer Lifetime Value in SMS Commerce?

Customer Lifetime Value (CLV or LTV) measures the total revenue a single customer generates over their entire relationship with a brand. In SMS Commerce, CLV specifically tracks revenue driven through text-based purchasing — drops, reorders, cart recovery, and order bumps that happen inside text conversations.

CLV is calculated by multiplying average order value × purchase frequency × customer lifespan. For example, a customer who spends $25 per order, buys 3 times per month, and stays active for 12 months has a CLV of $900.

In SMS Commerce, CLV tends to be significantly higher than through other channels because text-to-buy removes the friction from repeat purchasing. When reordering is as easy as replying to a text, customers buy more often and stay active longer.

Measuring CLV in SMS Commerce involves tracking three components per customer: average order value (AOV) from text purchases, purchase frequency (how often they buy via text), and retention (how long they remain an active text buyer).

SMS Commerce platforms track these metrics automatically since every transaction is tied to a specific customer and message. This makes CLV calculation straightforward — there's no attribution ambiguity about whether the text channel drove the purchase.

Brands can improve SMS CLV by increasing any of the three components: AOV (through order bumps and cross-sells), frequency (through AI-timed replenishment prompts), or retention (by keeping the purchasing experience frictionless so customers don't lapse).

CLV is the metric that justifies investment in SMS Commerce. If acquiring a text subscriber costs $5 and their CLV is $500, the ROI is clear. Brands on AudienceTap see that customers who buy through text spend 3x more than average customers — indicating that the text channel drives meaningfully higher CLV.

CLV also informs strategic decisions. If text-to-buy customers have higher CLV than website customers, it makes sense to invest more in growing the text subscriber list and driving first text purchases.

For DTC brands selling consumables, the CLV impact of AI-timed replenishment is particularly significant. Customers who receive well-timed reorder prompts via text purchase more frequently and lapse less often than those relying on email reminders or memory.