Full definition
LTV is the total amount a customer will spend with your business over the entire relationship. For example: a customer paying $60/month who stays for 2 years has an LTV of $1,440. A high LTV signals a healthy business.
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Why it matters
LTV sets the ceiling on what you can spend to win a customer. Without it, you are guessing whether marketing is profitable or quietly burning cash.
🧮 A worked example
A customer pays $80 a month and stays 14 months on average — an LTV of $1,120. That makes acquiring one for $200 an excellent deal, and $320 still sensible.
⚠️ The common mistake
Calculating LTV on revenue rather than margin. If your gross margin is 40%, the real LTV above is $448, not $1,120 — and your acquisition decisions change completely.
Full guide on the blog
Want to go deeper on this term?
ROI on Facebook Group Marketing — How to Calculate It and Why It Matters
How much are you actually earning back from every dollar you spend on Group marketing? Here's the methodology for calculating ROI accurately.
Read the full guide🔗 Related terms
More terms in Analytics & Metrics
Impressions
How many times your post appeared on someone's screen
Reach
The number of unique people who saw your post
Engagement Rate
The percentage of viewers who commented, liked, or shared
Conversion Rate
The percentage of visitors who complete a desired action
CAC (Customer Acquisition Cost)
How much it costs to win a new customer
Churn Rate
The percentage of customers who leave each month
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