What is LTV or lifetime value?

Abbreviation of Lifetime Value, which means an estimate of the revenue generated by a customer during the time that the said customer maintains a commercial relationship with a business. This calculation is performed by applying the following formula:

LTV = (average customer spend) x (number of times the customer is expected to repeat the purchase over one year) x (average length of the relationship, in months or years).

Other denominations:
Lifetime value, CLV, CLTV

 
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