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Analytics

What is LTV (Lifetime Value)?

The total revenue a customer generates for the brand over their lifetime. A critical metric in subscription and e-commerce models.

Detailed definition

LTV = average basket × annual purchase frequency × average customer lifespan. In SaaS: monthly subscription × number of months. E-commerce example: 3 orders a year × 400 TL × 2 years = 2,400 TL LTV. The LTV/CAC ratio is one of the main signals for investment decisions; 3:1 is a commonly used reference point.

Examples

  • A subscription customer's LTV is usually higher than that of a one-off customer; the gap is calculated from your own customer data.

Related terms

CAC (Customer Acquisition Cost) The total cost of winning one new customer — CAC = marketing spend ÷ number of new customers. Subscription Model Automatic recurring delivery to the customer (weekly or monthly) — common in beauty, food and supplements. Performance Max (PMax) Google's AI-driven campaign type — it automates the whole inventory of Search, Display, YouTube, Shopping and Maps in a single campaign. Google Shopping Ads E-commerce ads that appear in Google search results with a product image, a price and the brand. Lead Form Ads A format in which the user fills in the form inside the ad when they click it, without going to the site.
Category Analytics

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From the same category

Other terms in the Analytics category

GA4 (Google Analytics 4) Google's next-generation analytics platform — an event-based data model that replaced GA Universal. GTM (Google Tag Manager) Google's tag management system for adding analytics and advertising tags without touching your site code. Enhanced Conversions A way of improving conversion matching by sending first-party data such as email and phone number to Google Ads in hashed form. Conversion Rate The percentage of visitors to your site who complete the desired action (a purchase, a form submission). Attribution Model The model that shares out a sale or conversion across the channels and touchpoints behind it.
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