Growth Metrics
LTV (Lifetime Value)
The total revenue a business expects to earn from a single customer over their lifetime.
Customer Lifetime Value (LTV or CLV) estimates the total revenue one customer generates before churning. Formula: Average Revenue Per User (ARPU) divided by churn rate. Example: $50/month ARPU with 5% monthly churn = $50/0.05 = $1,000 LTV. The LTV:CAC ratio (lifetime value to customer acquisition cost) should be at least 3:1 for a healthy business. Buyers on Enterpricr look at LTV to understand how much each customer is worth and whether the acquisition price makes economic sense.