What Is Customer Lifetime Value (LTV)?

Customer Lifetime Value estimates the total revenue or gross profit a customer generates across their entire relationship with a business.

Formula & calculation

LTV = Average Order Value × Repeat Purchase Frequency × Retention Lifespan

Practical example

A customer ordering 4 times a year at a 45 USD average order value over 2 years generates a 360 USD LTV.

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AdsRanger (2026). What Is Customer Lifetime Value (LTV)?. Retrieved 13 November 2026, from https://adsranger.com/en/glossary/ltv.

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