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