LTV (Customer Lifetime Value)

LTV (Lifetime Value), also called CLV (Customer Lifetime Value), predicts how much revenue an average customer generates for as long as they stay a customer. It's calculated by combining average order value, purchase frequency, and customer lifespan.

LTV is one of the most important metrics for justifying marketing spend: if LTV comfortably exceeds CAC, you can confidently invest in customer acquisition.

Customer service directly impacts LTV: customers who are well taken care of stay longer and purchase more often, raising the lifetime value per customer.