##Term
Lifetime Value (LTV) (ˌlaɪfˈtaɪm ˈvæljuː)
##Definition
Lifetime Value, or LTV, is the total amount of money you expect to earn from a customer throughout their relationship with your business. It measures how valuable a client is to your company over time.
###Where you'll find it
In the Business platform, LTV metrics are typically available within the customer relationship management (CRM) tools or business analytics sections. This feature might vary depending on the plan you have subscribed to; it is more common in premium or enterprise-level plans.
###Common use cases
- Forecasting Revenue: Estimating future income from existing customers.
- Evaluating Marketing Spend: Determining how much to invest in acquiring new customers based on their potential contribution.
- Improving Customer Service: Identifying high-value customers to prioritize support and retention initiatives.
###Things to watch out for
- Accuracy: Calculating Lifetime Value can be complex, and accuracy can vary based on the data and methods used.
- Changes in Customer Behavior: LTV is an estimate and can change if customer purchasing behaviors shift.
- Plan Limitations: Some versions of Business may not include advanced LTV calculation tools, depending on your subscription level.
###Related terms
- Customer Relationship Management (CRM)
- Return on Investment (ROI)
- Customer Acquisition Cost (CAC)
- Customer Retention
- Profitability Analysis