LTV (Lifetime Value)

LTV stands for Lifetime Value and expresses the total revenue a company expects to earn from a customer over the entire customer relationship. The figure accounts for average purchase value, purchase frequency and how long the customer stays. LTV is often used together with CAC to assess whether it is profitable to acquire more customers.

A webshop whose customers spend an average of $30 four times a year over three years has an LTV of $360 per customer.