Customer Lifetime Value (LTV)
Measure the amount of gross profit that is generated from a customer over the entire time they do business with a company.
Overview
Understanding the total value of an added customer is crucial knowledge for your team. With the Customer Lifetime Value metric, you can monitor just how much revenue every new customer will bring into the company throughout their lifetime.
Formula
Gross margin (%) x Length of lifetime in pay periods x Revenue per subscription per pay period
Reporting frequency
Quarterly
Example of KPI target
$240,000 LTV
Audience
CEO, CMO, CFO, Marketing Manager, Sales Manager
Variations
LTV
CLV
Lifetime value of a customer
