Customer Lifetime Value (LTV)
The total profit a business expects from a customer across the whole relationship — the number that sets how much you can spend to acquire one.
Customer lifetime value is the projected profit from a customer over the entire time they do business with you, not just the first sale. For service businesses with repeat visits, maintenance plans, and replacements, LTV often dwarfs the first transaction, which changes what a lead is actually worth.
LTV is the ceiling on acquisition spend: if a customer is worth a few thousand dollars over years, a higher cost per lead is justified than a single-job mindset would allow. Knowing LTV by channel and customer type is what lets a business outspend competitors on the leads that pay back the most.
Related terms