Are You Ready to Hire? Start with This Overlooked Metric
If you’re thinking about expanding your team, don’t just look at your revenue. Look at your customer lifetime value (CLV).
You might be seeing a steady stream of new customers. Your revenue looks decent. On the surface, growth feels… okay. But when you take a closer look, you’re still wondering:
Can I really afford to hire someone right now?
Before you make a hiring decision, it’s essential to understand whether your current customers are bringing in enough long-term value to support your next move.
What is customer lifetime value (CLV)?
CLV tells you how much revenue the average customer brings to your business over the full span of their relationship with you. It helps answer key questions like:
How much can I afford to spend to acquire a new customer?
Can I sustainably grow my business without constantly chasing new leads?
Will this next hire actually pay off, or just add more stress?
We’re not saying you should view your customers as walking dollar signs. At SOAN, we deeply value the human side of business. When our clients grow, we celebrate right alongside them.
But healthy businesses require healthy numbers. CLV is one of the clearest signals of readiness for growth.
What CLV can reveal about hiring readiness
One of our clients, a subscription-based business, ran their numbers and discovered their CLV was about $300. But industry benchmarks suggested it should be closer to $500 or $600.
Instead of rushing to hire or pump more money into ads, we helped them focus on increasing their CLV. Here’s what worked:
Expanded their product mix to increase retention → CLV rose to $350
Launched a loyalty program that rewarded long-term customers → CLV hit $400
Created bundled offers that added value without extra delivery costs → CLV crossed $550
All without increasing their customer acquisition budget. Within six months, their customer base was more profitable and predictable.
That’s when they knew they were ready to grow their team.
A simple CLV formula
You don’t need a fancy dashboard to get started. Try this back-of-the-napkin formula:
CLV = Average purchase value × Purchase frequency × Customer lifespan
Let’s say:
Average order = $50
Orders per month = 2
Customer lifespan = 12 months
CLV = $50 × 2 × 12 = $1,200
Now imagine increasing order frequency or extending the customer lifespan. That growth is what gives you the confidence (and cash flow) to hire well.
Before you hire, run the numbers
Thinking about your next hire? Start with the value your current customers bring to the table.
When you increase CLV, you’re not just boosting revenue. You’re building a more stable, resilient foundation that can support a growing team.
Before your next hire, look beyond revenue and CLV
Hiring readiness isn’t just about attracting new talent — it’s about keeping the great people you already have. Tracking your Employee Retention Rate can reveal whether your business is ready to grow sustainably or at risk of losing hard-earned team capacity.