LTV
metricsLifetime Value
Definition
The total revenue a customer generates throughout their relationship with your business.
How to Calculate LTV
Average Order Value × Purchase Frequency × Customer Lifespan
Example
Scenario: Customer spends $50 per order, orders 4 times per year for 2 years
Calculation: $50 × 4 × 2 = $400 LTV
What's a Good LTV?
Should be 3-5x your CPA for healthy unit economics
Common Mistakes
- Using overly optimistic LTV projections
- Not accounting for churn and refunds
💡 Expert Tip
Track cohort-based LTV over time. Month 6 LTV is often more predictive than projections based on early customer behavior.
— Based on $100M+ in managed ad spend
Related Terms
By Kristijan Arapov • Based on $100M+ in managed ad spend • Updated 2026