What is Lifetime Value (LTV)?

Lifetime Value (LTV) is a prediction of how much a customer will spend with your company over time. It's an important metric in B2B sales, where relationships often last for years.

To calculate LTV, you look at factors like average purchase value, purchase frequency, and customer lifespan. A high LTV means a customer is very valuable to your business.

Knowing LTV helps you make smart decisions. It shows how much you can spend to acquire a new customer while still being profitable. It also helps you identify your most valuable customers.

LTV can guide your marketing and sales strategies. You might decide to invest more in retaining high-LTV customers. Or you might create special offers to increase the LTV of other customers.