From Diligence to Growth: Using CLV to Unlock Post-Acquisition Value

April 1, 2025

We’ve discussed previously how Customer Lifetime Value (CLV)-based analysis can take due diligence to the next level for investors. For example, by focusing on unit economics, business model sustainability, and how customer value has evolved over time, CLV gives investors a much sharper view of where a company’s revenue is really coming from and where it’s headed. Instead of just looking at historical financials, investors using CLV are able to understand whether that revenue is coming from loyal, repeat customers or from one-time buyers who may never come back. If you want to go deeper into this, check out our post on CLV as a Critical Strategic Asset in Private Equity.

But analyzing these metrics is only part of the story. How much value can realistically be created post-acquisition plays a huge role in whether an investment is worth pursuing in the first place. That’s why identifying value creation opportunities should be a core part of the customer-based due diligence process – not something saved for after the deal is done. CLV analytics can and should be used upfront to shine a light on where the real post-acquisition upside lives. Knowing where to invest in your customer base (who to acquire more of, who to retain, who to develop) can dramatically change both the investment thesis and the ultimate return on that investment.

Take a recent project we did with a PE firm considering investing in an e-commerce company. In addition to evaluating the overall health of the customer base, finding key pockets of value, and understanding the key drivers of customer value, we also identified multiple opportunities to grow that value post-acquisition through a deep dive into profiles of the company’s best customers, informing smarter customer acquisition, retention, and development. Here’s what we found:

1. Who are the best customers?
We started by identifying the top 20% of customers who were responsible for over 60% of total customer lifetime value. But we didn’t stop at the surface; we broke these customers down across segments like acquisition channel, product preferences, average spend, purchase frequency, and geography. This gave us rich, actionable profiles that clearly differentiated high-value customers from the rest. For example, many of the top customers had certain strong brand affinities, purchased across multiple categories, and had a bigger basket size.

2. How can the company find more customers like them?
These high-value customer profiles can become the foundation for building value-based lookalike audiences – a powerful tool for targeted customer acquisition. Platforms like Meta, Google, TikTok, and others allow advertisers to build audiences modeled on their highest-value customers, not just recent converters. Our analysis showed that customers interested in specific sports and leisure categories and buyers of certain high-margin brands were significantly more valuable than others. With that insight, the company could build more targeted, brand-specific audiences to focus their ad dollars where it counts.

3. Which customers should the company bid more for, and by how much?
We also looked at value-based bidding – where platforms dynamically adjust bids based on how valuable a prospect is likely to be. The catch? You need highly accurate CLV estimates to feed into those models. That’s where we came in. We delivered reliable CLV projections by segment, giving the company a data-driven way to decide how much to bid. When paired with value-based lookalikes, this approach often increases ROAS by 30–40% or more. It’s not just about spending more, it’s about spending smarter.

4. Where should the company reallocate its budget?
Our analysis surfaced a few high-performing but underfunded areas – small segments that delivered high value but weren’t getting much attention. Think niche product lines, overlooked regions, or underutilized acquisition channels. With this insight, the company could shift budget to scale these segments more effectively and quietly gain ground where others weren’t looking.

5. AOV as an early indicator of loyalty
One more interesting insights we uncovered was that higher-frequency customers didn’t just buy more often – they also tended to spend more per order. That makes frequency a valuable early indicator of future customer value. If a new customer makes an above average order, there’s a strong chance they’re on their way to becoming a high-value customer. That’s a great opportunity to introduce upsells, personalized recommendations, or loyalty nudges.

6. Retention campaigns with real ROI
Retention matters, but it only makes sense to invest in the right customers. We identified a group of customers who were showing early signs of churn but had strong potential for future value. Using platforms like Klaviyo or Iterable, the company could run targeted re-engagement campaigns based on individual behaviors and preferences. These types of campaigns are far more efficient than blanket discounts and can deliver a strong ROI by saving high-value customers before they’re lost.

7. Strategic customer development
Last but not least, we flagged a segment of customers with high development potential. These were the ones most likely to respond to loyalty programs, premium offers, or early access to new products. Think of them as future brand champions. With the right touchpoints, such as exclusive offers, member-only perks, or curated content, they could be nudged into even higher value brackets. Plus, their feedback and behavior can help shape product and customer experience strategy moving forward.

Bottom line: CLV analytics isn’t just about deciding whether or not to invest – it’s about knowing what to do once you own it. For private equity firms, this approach provides a practical, data-driven way to unlock growth that might otherwise go unnoticed. When you know how to grow customer value from day one, you’re not just hoping for upside – you’re planning for it.