Lifetime Value (LTV) is a financial and marketing #metric that estimates the total revenue a business can expect from a single customer account throughout the entire duration of their relationship. Lifetime Value provides organizations with a basis for forecasting profitability, informing customer acquisition strategies, and guiding decisions about marketing spend and resource allocation. By assessing historical purchasing behavior, average customer lifespan, and profit margins, companies use LTV to identify high-value segments, optimize retention efforts, and prioritize product or service improvements. This measure is frequently referenced in subscription-based business models, e-commerce, and @Software as a Service (SaaS) industries, but its relevance extends to any context where understanding long-term customer impact is critical. Calculating LTV accurately supports strategic planning and investment by offering a holistic view of customer contributions over time.

Contexts

• #marketing-lexicon (See: @Marketing Glossary)
• #startup-lexicon (See: @Startup Glossary)