Customer Lifetime Value (CLTV, CLV or LTV)

What is Customer Lifetime Value

LTV predicts the amount of net profit attributed to a specific customer. By looking at this number in the context of an online store's marketing campaigns, and estimating how much a customer will spend on a certain product, LTV direct marketing spend and ensures focusing on engaging the most active and effective users.

Why does Customer Lifetime Value matter

If a store can successfully predict a customer's lifetime value, this will give marketing teams a stable base on which to develop their marketing campaigns on and what to focus their advertising spend on.