Customer Lifetime Value (LTV/CLV)

Definition

The total revenue a customer generates over their entire relationship with a company, minus acquisition costs. The metric that separates sustainable businesses from the ones burning VC money hoping something sticks.

Example Usage

Our LTV is $300 and CAC is $250, leaving us $50 per customer for survival—which explains why we're aggressively moving to annual billing models.

Origin

Financial metric from the 1980s; formalized in SaaS metrics in the early 2000s.

Fun Fact

Healthy SaaS companies target 3:1 LTV:CAC ratio; most achieve 1:1 and celebrate, not realizing they're not actually profitable.

Source: SaaS financial metrics & customer economics

Related Terms

Intermediate

responsive display ad

Adaptive advertisements that automatically adjust size, format, and appearance to fit available ad spaces, using machine learning to optimize combinations. Google's way of saying 'just give us assets and we'll figure it out.'

📣 Marketing / Advertising

Intermediate

marketing mix

The combination of tactics and channels used to promote your product, traditionally reduced to the 'Four Ps' (Product, Price, Place, Promotion) by people who love oversimplifying complex systems. It's strategic planning that fits on a napkin.

📣 Marketing / Advertising

Beginner

kick

In marketing, the emotional rush or novelty factor that gets people excited about a product or campaign. A product with 'kick' has the X-factor that makes people actually care instead of just scrolling past. Without it, you're just another forgettable ad in a feed of thousands.

📣 Marketing / Advertising

Intermediate

ownable

A brand attribute, message, or positioning unique enough that competitors can't easily copy it. The marketing equivalent of a defensible moat, but made of adjectives.

📣 Marketing / Advertising

Intermediate

hero content

High-production-value flagship content designed to make a big splash and attract massive attention, typically created infrequently. Your marketing team's Avengers movie, budget included.

📣 Marketing / Advertising

Intermediate

Organic Reach

The number of people who see your content without you paying for it, a number that social media platforms have been slowly suffocating to death for years. It's like a restaurant that keeps shrinking portion sizes until you're forced to order extra sides.

📣 Marketing / Advertising

Translate This Term

See “Customer Lifetime Value (LTV/CLV)” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

Camp Rock

One of the worst, most terrible movies ever. Only popular because Disney takes ideas that worked well (High School Musi...