Paid Media
LTV (Customer Lifetime Value)
Quick definition
The total revenue a customer generates over their entire relationship with your brand.
What it actually means
LTV varies by category: consumables and subscription brands see LTV grow well above first-order AOV; one-off purchase categories may stay close to first-order AOV. Calculating LTV honestly requires cohort analysis: group customers by acquisition month, track cumulative revenue at month 3, 6, 12, and 24. Quoting LTV from only the top customers inflates the number. Operators also watch LTV to CAC and the payback period.