Performance marketing
LTV
Lifetime Value — how much a customer brings a company on average over the whole relationship.
LTV (Lifetime Value) expresses a customer's total value over the time they keep buying. It factors in average order, purchase frequency and relationship length.
Why it matters
LTV determines how much you can afford to pay to acquire a customer (CAC). Without knowing LTV, you set budgets blind.
Real-world example
A $20/month subscription with an average lifespan of 20 months gives an LTV of $400. That justifies pricier acquisition a one-off sale couldn't support.
Related terms
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