KnowledgeCustomer Lifetime Value
LTV · The value a customer is expected to contribute over the relationship with your business.
Understand LTV in context.
Simply explained explanation
The value a customer is expected to contribute over the relationship with your business.
Professional explanation
Historical or predicted cumulative revenue or contribution from one customer over a defined horizon.
Analytical explanation
Pair LTV with CAC, payback time and cohorts. Extrapolated lifetime assumptions can exaggerate the economics of a young customer base.
Technical explanation
One illustrative gross-profit LTV model = average order value × purchase frequency × gross margin × retention horizon. Real models should use cohort revenue/cost or survival predictions.
Four complementary explanations — choose your level. Technical definitions are platform-specific where noted.
↗ How to use it
Track realised 90/180/365-day cohorts first.
⚠ Common interpretation mistake
Revenue LTV and profit LTV are not the same.