Lifetime Value (LTV) is a metric that estimates the total revenue a business can expect from a customer throughout their entire relationship. It helps companies understand how much they should invest in acquiring new customers and retaining existing ones. By calculating LTV, businesses can make informed decisions about marketing strategies and customer service improvements. To calculate LTV, businesses often consider factors like average purchase value, purchase frequency, and customer lifespan. For example, if a customer spends an average of $50 per purchase and shops $4 times a year for $5$ years, their LTV would be $1,000. This insight allows companies to prioritize customer satisfaction and loyalty.