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Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) estimates the total revenue a company expects to earn from a customer over their relationship with the company. It helps businesses understand the long-term value of a customer.

  • Formula: LTV = Average Revenue per Account (ARPA) × Customer Lifetime (in months or years)
  • Application: Provides insights into customer profitability, aiding in resource allocation for customer acquisition and retention.

Learn more about customer lifetime value: