What Is LTV? Customer Lifetime Value Explained
A practical explanation of customer lifetime value, margin-adjusted LTV and payback.
Simple LTV = average order value × purchase frequency × customer lifespan
$50 AOV × 3 orders/year × 2 years = $300 revenue LTV before margin.
Why this term matters
LTV becomes useful when you connect it to the next business question. Pair it with the right denominator, time range and outcome; never optimize a single number without checking the quality of the underlying traffic or profit.
References and methodology
We use primary documentation where available and treat calculators as planning aids, not guarantees. Check the linked source when a platform changes its rules.
- Google Analytics: Lifetime value
Official Analytics context.
Turn this answer into a repeatable growth workflow.
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