Business

Lifetime Value (LTV)

Total revenue generated over entire customer relationship.

Glossary Term
3 Related Terms

Lifetime Value (LTV), or Customer Lifetime Value (CLV), represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.

The Importance

LTV helps determine how much you can reasonably spend to acquire a customer (CAC). A healthy business typically aims for an LTV:CAC ratio of 3:1 or higher.

The Value-First Perspective

LTV is the ultimate lagging indicator of Relationship Health.

  • You cannot “hack” LTV; you earn it through consistent value delivery.
  • Retention and Expansion are the drivers of LTV.
  • Advocacy (not captured in traditional LTV) adds a multiplier effect—a high LTV customer who refers others creates value far beyond their own spend.

Focus on the relationship, and the value will follow.

Related Terms

Customer Acquisition Cost (CAC)

Total cost to acquire a new customer.

Customer Retention

Ability to keep customers returning.

Relationship Health

Quality and depth of authentic connection.

More Business Terms

Change Management

Preparing and guiding individuals through change.

Customer Acquisition Cost (CAC)

Total cost to acquire a new customer.

Customer Journey

Complete experience from discovery to advocacy.

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