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LTV (Lifetime Value) Solver
Calculated Result
LTV (Lifetime Value) = aov * frequency * lifespan
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Target Logic: LTV (Lifetime Value)
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What is LTV (Lifetime Value)?
LTV (Lifetime Value) predicts the total revenue a single customer will generate over their entire relationship with your brand. It's the single most important input for deciding how much you can afford to spend on customer acquisition.
Worked Example
A subscription service has an AOV of $30/month, customers purchase on average 1× per month, and the average customer stays 24 months. LTV = $30 × 1 × 24 = $720. With a $720 LTV, a $150 CAC gives a comfortable 4.8× LTV:CAC ratio.
Related ECOMMERCE Metrics
ROAS
ROAS (Return on Ad Spend) measures how much revenue you generate for every dollar spent on advertising. It's the fastest signal of campaign revenue efficiency and is widely used to optimize and scale direct-response campaigns.
Add-to-Cart Rate
Add-to-Cart Rate measures how many ad clicks result in a product being added to the shopping cart. It's a mid-funnel signal that indicates product appeal, pricing competitiveness, and landing page quality.
CAC
CAC (Customer Acquisition Cost) measures the total cost of acquiring one new customer — including all marketing and sales spend. Comparing CAC to LTV tells you whether customer relationships are profitable over time.
Cart Abandonment Rate
Cart Abandonment Rate shows how often shoppers add products to cart but leave before completing the purchase. It directly highlights friction in the checkout experience — and is a major lever for revenue recovery through retargeting.
Expert Insights
How do I improve my LTV (Lifetime Value)?
Improving LTV (Lifetime Value) requires a dual focus on quality and efficiency. For ECOMMERCE metrics, we recommend auditing your top-performing segments and re-allocating budget from underperforming areas to those with higher baseline LTV (Lifetime Value) potential.
Is LTV (Lifetime Value) a primary KPI?
While LTV (Lifetime Value) is a critical indicator of regional performance, it should always be viewed alongside downstream metrics like ROI to ensure volume isn't coming at the expense of profitability.