Lifetime Value (LTV)
Overview
Lifetime Value (LTV) represents the total revenue you can expect from a single customer account throughout the business relationship.
LTV = Order Revenue / Unique Customers
The calculation is based on data from the Orders table.
Insights and Actions
Lifetime Value (LTV) is crucial for understanding the long-term value of your customer base and guiding strategic investment in customer acquisition and retention. Efficiently leveraging LTV data can guide strategic business decisions:
- Optimize Customer Acquisition Costs (CAC): Compare LTV to CAC to ensure you're investing a sustainable amount to acquire new customers, aiming for a high LTV to CAC ratio.
- Tailor Retention Strategies: Focus on high-LTV customer segments with personalized marketing, loyalty programs, and customer service enhancements to boost retention.
- Inform Product and Service Development: Use insights from LTV analysis to invest in products or services that are likely to increase the lifetime value of customers.
- Adjust Pricing Strategies: Analyze the impact of pricing changes on LTV and adjust your strategies to maximize long-term revenue from your customer base.
Example Use
Prompt
Give me my LTV for customers over the past year
Response
Updated about 1 month ago