Customer Lifetime Value (LTV)

Definition

The total profit expected from a customer over their relationship with you—the number you use to justify unlimited marketing spend.

Example Usage

Our LTV is $15,000 per customer, so spending $500 to acquire them actually makes sense mathematically.

Origin

Business metrics, formalized 1980s-1990s

Fun Fact

LTV varies wildly by cohort; early customers often have 3x higher LTV than late-stage acquisitions.

Source: Business metrics standards

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