Agriculture runs on relationships and until you know what those relationships are worth, your lead gen efforts are guesswork.

Farmers or agribusiness buyers stick around for years, sometimes decades. A customer who finances a farmland deal, signs a multi-year insurance policy, or buys your equipment doesn’t just hand you one check. They generate value over time: through loan payments, renewals, service contracts, upgrades, referrals, you name it. 

But that long-tail value isn’t displayed via a neon sign on a customer’s forehead. You’ve got to do some math to figure it out and align your marketing accordingly.

What actually is CLV? And why does it matter? 

To understand CLV, you have to tweak how you think about value: You’re not asking how much a sale brought in today. You’re asking how much this relationship is worth over the long haul.

This mindset shift helps you realize you don’t just need more leads in the door. You need better customers in your corner. Retention, then, becomes just as important as acquisition. 

In ag, the stakes for bigger CLV are even higher. This industry is one of the most seasonal sectors in existence — so sales cycles are long. Deal sizes are often massive, and margins are razor-thin. 

How you spend your marketing dollars might shift if you understand that a particular segment of your customer base spends on average about 10X what other customers spend over a 5-year period.

Zooming out, CLV can also better inform your sales costs, paid media budgets, and even hiring strategy. Ultimately, it’ll guide your financial projections. (For now, we’ll just focus on marketing.)

What drives CLV?

To measure CLV, there are a few universal questions you should be asking, whether you’re in ag lending, fertilizer sales, or farm accounting software. 

• How long does the average customer actually stay with you? (And do you have the data to prove it?)
• What does one “win” mean for your business? For example: a $15K seed order, a $1M operating loan, or a multi-year SaaS license.
• What’s the difference in value between your average customers and your best customers? If you focus too much on quantity of customers, can you afford to lose quality (the top 10%)? 
• Are you marketing to increase your customer base or customer value? (More volume isn’t always more long-term dollars!)
• Are you spending more to get a customer than they’re actually worth? Overspending on acquisition could be a fatal mistake in a space like ag, where it could be months before your next sales cycle.

Two caveats: CLV can be harder to gauge (or achieve!) for startups who are trying to balance investment dollars as value is realized. Plus, it’s important to remember that CLV assumes current costs to serve a customer over a lifetime which isn’t perfect math, either.

Depending on your specific subsector, you’ll have a few other factors impacting your organization’s CLV. Let’s take a look at a handful:

Ag Lenders

• How many years does the typical borrower stay with you after their first loan? 
• Are you factoring in renewals and refinance activity? Do you cross-sell with insurance or savings products? 
• How much is one high-credit operator worth to your institution over time?

Input Manufacturers

• How often does a grower actually switch input suppliers? What makes them leave? 
• Is your team focused more on winning new acres with new growers? Or building on existing customers’ acres over time? 
• What kind of influence does the channel (distributors & retailers) have on your sales? Are they worried about getting products out the door in the short run, or are they focused on building longer term relationships centered on your brands?

SaaS Companies

• What’s your churn rate? How does it vary by farm size or region? (If you don’t have this data already, start collecting it!)
• Which customer segments (by crop type, geography, operation size, etc) drive the highest lifetime value? 
• Are your longest tenured customers also expanding into premium plans or advanced subscription levels?

Run the Numbers on Your CLV

Not sure what your numbers look like? Use our quick CLV calculator to get a ballpark estimate.

This is a simplified model using standard inputs. Your actual CLV may vary depending on factors like your sales process, customer acquisition costs, and specific product or service mix.

Side-by-Side Example: High CLV vs Low CLV Farmer

Let’s take a look at how this plays out on the ground. In this scenario, we have a row crop farmer who needs a seven-figure operating loan. On the other side, there’s a smaller-scale, specialty crop farmer who’s just starting out as a shorter-term borrower. 

How do these two farmers’ CLV stack up? 

Variable	Farmer A: Long-Term Row Crop Operator	Farmer B: Short-Term Borrower
Loan Size	$1,000,000	$250,000
Interest Margin	2.5%	2.5%
Annual Fee Income	$1,500	$300
Annual Servicing Cost	$3,500	$2,500
Customer Lifespan	15 years	3 years
Customer Acquisition Cost	$2,000	$2,000

Farmer A, on the big row-crop operation, hands you a $23,500/year profit (2.5% of $1,000,000, plus a $1,500 annual fee, less the $3,500 annual servicing cost). 

Now, multiply that annual profit over the 15-year lifespan, and subtract your $2,000 acquisition cost — and you’ve got a CLV of $350,500. Not too shabby. 

Farmer B, on the other hand, only brings in about $3,050/year (2.5% of $250,000, plus a $300 annual fee, minus the $2,500 servicing costs). Multiply $3,050 by five years, subtract that $2,000 acquisition cost, and you’re left with $7,150. Womp womp.

Farmer B might be quicker to sign. But after their initial term is up, they could refinance with another lender and test different options (like the FSA or a national lender). Meanwhile, Farmer A sticks around for the long haul. You get to know their kids, and you’ll probably get a Christmas card. 

So how do you keep your Farmer A types around? Build strong relationships, cross-sell with other products, and aim for customers who value the local knowledge and true partnership you bring to the table. 

In both cases, you spend the same amount ($2,000) to acquire the sale. But when it comes to the lifetime value of these two customers, there’s a six-figure gap. Even when two farmers pay the same interest rate, their end values can be wildly different.

So when you have an acquisition/marketing budget in front of you, are you aiming it at Farmer A’s or Farmer B’s?

Quick tip: Relationship depth is more powerful than marginal pricing, so prioritize product mix, frequency, and support. For lower-value accounts, be more selective and efficient. You can still serve Farmer B—but it needs to be done in a smarter, lower-touch way that makes economic sense. We all know farmers talk, so don’t neglect relationship-building!

Use CLV to work smarter, not harder

The smartest ag companies are already running their CLV numbers. And every day you’re not doing the same could be costing you cash (and long-term business stability).

Sure, you could aim your marketing budget at the quick wins and find yourself constantly scrambling on the hamster wheel of short-lifespan leads. Or you could invest into long-term value, using CLV as your metric.