Why it matters
A simple version multiplies average monthly gross profit by expected lifetime in months. Comparing LTV with CAC shows whether growth is sustainable, and a ratio near 3 to 1 is a common benchmark.
Glossary // C
Customer lifetime value estimates the gross profit a customer generates over the whole relationship.
A simple version multiplies average monthly gross profit by expected lifetime in months. Comparing LTV with CAC shows whether growth is sustainable, and a ratio near 3 to 1 is a common benchmark.