LTV (Lifetime Value)
Quick answer
What is ltv (lifetime value)?
The total revenue a business expects to earn from one customer over the entire time they stay a customer.
Also called: Customer lifetime value, CLV, LTV sales.
How to calculate ltv (lifetime value)
LTV = average purchase value × average number of purchases per customer
Worked example: A $49/month membership kept for an average of 8 months = $49 × 8 = $392 LTV.
LTV is what tells you how much you can afford to spend to acquire a customer.
In plain English
LTV looks past the first sale to everything a customer buys afterward — renewals, upsells, repeat purchases — so you know the real value of acquiring them, not just the value of their first transaction.
Example
A $49/month subscriber who stays for 10 months has an LTV of about $490.
Why it matters
LTV is what makes a higher cost per acquisition (CAC) worth paying, and it's why upsells and nurture sequences matter as much as the front-end offer.
Common questions
- What does LTV mean in sales?
- LTV is the total revenue one customer is expected to produce across their whole relationship with you, not just on the first sale.
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