Homonym: LTV (Value)
LTV, or Lifetime Value, is a metric used to estimate the total revenue a business can expect from a customer throughout their relationship. It helps companies understand how much they should invest in acquiring new customers and retaining existing ones. By analyzing customer behavior and purchase patterns, businesses can make informed decisions about marketing strategies and resource allocation.
Calculating LTV typically involves considering factors like average purchase value, purchase frequency, and customer lifespan. This information allows businesses to identify their most valuable customers and tailor their services or products to enhance customer satisfaction and loyalty, ultimately driving profitability.