Customer Lifetime Value (LTV/CLV)

Customer Lifetime Value (CLV or LTV) is a metric that represents the total net profit a company can expect to earn from an average customer throughout their entire relationship with the business.

It's essential to calculate (Customer Acquisition Cost (CAC)) and (Customer Retention Rate (CRR)) to calculate CLV.

A high LTV means you'll be able to afford to spend more on customer acquisition.

If you offer one-time payments, LTV is the total amount your customers will spend.

If you offer subscriptions, LTV is the total amount of money a customer will spend before they churn.