Marketing Acronyms

Life Time Value (LTV)

Customer lifetime value (CLTV)

What does it mean:

Plain and simple it’s the average revenue that each of your customers gives you over their lifetime. It’s most applicable to a recurring SaaS business model but can be used in other models. 

The Formula:

Average Monthly Recurring Revenue Per Customer (ARPU) ÷ User Churn Rate = LTV

Use it in a sentence:

To colleagues:

“Our LTV has been very flat, are there any add-on services we can start to sell to increase it?”

To investors:

“We are improving our LTV by reducing churn and selling into larger companies now.”

At a party:

“I don’t want to brag, but our LTV is higher than Dropbox.”

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