Customer Lifetime Value (LTV) Metric

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

Related Metrics & KPIs

Lead Conversion Rate

Referral Traffic

First Visit

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