LTV (Lifetime Value): what it is and how to calculate customer value
LTV (Lifetime Value) is a metric that determines how much money a single customer приносит on average over the entire period of interaction with a company.
LTV Formula:
LTV = ARPU (average revenue per user) × customer lifetime
Why LTV is calculated:
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to properly allocate the customer acquisition budget;
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to understand how effectively the company retains its audience;
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to forecast the return on advertising and marketing strategies;
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to evaluate the long-term value of a customer for the business.
Marketing terms in simple language.
SMM Team marketer glossary.
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