Glossary
What is LTV (Lifetime Value)? Formula, Benchmarks & Tips 2026
LTV (Lifetime Value) measures the total revenue a customer generates throughout their relationship with your company. Learn how to calculate, benchmark and improve your LTV.
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Life Time Value (LTV) is the total value of a customer over their entire relationship with your company. Instead of using only one transaction for ROI calculations, you calculate the sum of all transactions the customer completes.
Why is LTV important?
LTV helps you understand how much you can invest in acquiring new customers. A common rule of thumb is that the LTV:CAC ratio should be at least 3:1 for a sustainable business model.