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LTV FAQ

Metrics beginner FOUNDERCMOCFO

Quick answers to the most common questions about LTV. For the full definition, formula, and benchmarks, see the LTV glossary page.

How do you calculate LTV?

LTV = ARPA x (1/CHURN)

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Keep exploring LTV

LTV is customer lifetime value, the estimated revenue value of a customer over their lifespan. Read the full LTV definition for formulas, benchmarks, and common mistakes.

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Related Concepts

Built from

  • ARPA — ARPA is average revenue per account, the average recurring revenue generated per customer…
  • Customer Churn — Customer Churn measures the percentage of customer accounts lost over a given period.

Feeds into

  • LTV to CAC Ratio — LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to eva…
  • CAC Payback Period — CAC Payback Period measures how long it takes to recover customer acquisition cost from cu…

Compare

  • LTV vs CAC — CAC is customer acquisition cost, the sales and marketing investment required to acquire c…

Related terms

  • ACV — ACV is annual contract value, the annualized revenue value of a customer contract.
  • Account Retention — Account Retention measures the share of customer accounts that remain active over a period…
  • Outbound Sales — Outbound Sales is a sales motion where the company proactively prospects and reaches out t…