What is customer lifetime value (LTV)?

Also called: LTV, CLV, lifetime value

Customer lifetime value (LTV) is the total revenue you expect from a customer over the whole time they stay. A simple estimate is average monthly revenue per customer divided by monthly churn rate.

A customer paying $20 a month with 5% monthly churn stays about 20 months on average, so their LTV is roughly $400.

Lowering churn raises LTV as much as raising prices does, and is often easier.

Why it matters for a launch

LTV sets how much you can afford to spend to win a customer, which decides which marketing channels make sense.