Measurement
Lifetime Value
The total expected profit or revenue from a customer across the whole relationship with the business.
What it means in practice
Lifetime value can be based on historical cohorts or forecast from purchase frequency, retention, margin, and average order behavior. Revenue-based and profit-based versions serve different planning purposes and require clear labeling.
Why it matters
Lifetime value sets an economic ceiling for acquisition spending and shapes which customer segments deserve investment.
How it is used
Creator marketers compare lifetime value by acquisition source when deciding which creators attract durable, profitable customers.
Also called
LTV, CLV, customer lifetime value
Related terms
- Customer Acquisition CostTotal sales and marketing spend divided by the number of new customers gained in the same period.
- ImpressionsThe total number of times content was rendered on screen, counting repeat views by the same person.
- Cost Per AcquisitionThe average media spend required to generate one completed conversion such as a purchase or signup.