What does LTV stand for, and how is it calculated?

Question

Accepted Answer

LTV stands for Lifetime Value, and it is calculated by determining the total revenue a customer will generate over their entire relationship with a company.

LTV is calculated by multiplying the average value of a sale by the number of repeat transactions and the average retention time of a customer.
For example, if the average sale value is $100, a customer makes 5 repeat transactions, and the average retention time is 2 years, the LTV would be $100 x 5 x 2 = $1000.
LTV helps businesses understand the long-term value of acquiring and retaining customers, and can inform marketing and customer relationship strategies.

Accepted Answer

Ltv stand for loan-to-value rario