Metric
LTV
Also known as: Customer Lifetime Value, CLV
Customer Lifetime Value — the total revenue you expect from a single customer over their lifetime.
LTV (Lifetime Value) estimates how much revenue you average per customer across the full relationship. Simple formula: ARPU / churn rate. More advanced: discounted cash flow with expansion revenue.
The LTV:CAC ratio is an important health metric: a ratio below 3:1 signals acquisition is too expensive relative to extracted value. Good B2B SaaS hits 3-5x; excellent 5x+.