Customer Lifetime Value (LTV)
Customer Lifetime Value (LTV or CLV) is the total revenue a business can expect from a single customer throughout their entire relationship. It is one of the most important metrics in business — knowing your LTV helps determine how much you can profitably spend to acquire a customer (CAC).
- 1Simple LTV = Average order value × Purchase frequency × Average customer lifespan
- 2Gross profit LTV = Simple LTV × Gross margin %
- 3LTV:CAC ratio: healthy businesses target 3:1 or higher
- 4Average customer lifespan = 1 / churn rate
£75 avg order, 4 purchases/year, 3-year lifespan=LTV = £900£75 × 4 × 3 = £900
Same but 40% gross margin=Profit LTV = £360£900 × 40% = £360
| Ratio | Assessment | Action |
|---|---|---|
| < 1:1 | Losing money | Immediate action required |
| 1:1 – 2:1 | Barely profitable | Reduce CAC or increase LTV |
| 3:1 | Healthy | Industry benchmark target |
| 4:1+ | Strong | May be underinvesting in growth |
| 5:1+ | Excellent | Consider scaling acquisition spend |
🔒
100% 免费
无需注册
✓
准确
经过验证的公式
⚡
即时
即时结果
📱
移动友好
所有设备