LTV is lifetime value, an estimate of the total revenue or profit a customer may generate over the full relationship with a business.
Example of LTV
Example: If a customer spends $300 per month and stays for 24 months, the revenue-based LTV is $7,200. A more advanced version subtracts service costs and uses gross profit instead of revenue.
Why LTV matters
It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.
Related terms
Frequently Asked Question
What does LTV mean?
LTV means lifetime value, an estimate of the total revenue or profit a customer may generate over the full relationship with a business.