Customer lifetime value, or LTV, estimates the value left across an entire relationship. Contribution margin rather than gross sales makes it more useful for comparison with acquisition cost.
The solid line in the demo shows realized value from transactions; the dashed line represents a forecast. Recompute the forecast as actual outcomes arrive.
One average for all customers hides meaningful differences. Account for cohort retention and margin by group.
When to use
Use it to set acquisition cost limits and prioritize retention investment.