Customer Lifetime Value (LTV)

The total revenue a business can reasonably expect from a single customer account throughout the business relationship.

How to Calculate LTV

LTV = Average Order Value × Purchase Frequency × Customer Lifespan

LTV vs. CAC

LTV is the ceiling for your acquisition costs. If your LTV is $100, you cannot spend $100 to acquire a customer (CAC) without going out of business due to operating costs.

The 60-Day LTV Rule

For cash-strapped startups, "Lifetime" is too long to wait. Focus on 60-Day LTV (or 90-Day LTV). If you can break even on ad spend within the first purchase and profit by day 60, you can scale indefinitely.

Improving LTV

Increasing LTV is often cheaper than lowering CAC. Strategies include:

• Subscription Models: Turning one-time buyers into recurring revenue.
• Email Marketing: Automated post-purchase flows to drive repeat purchases.
• Loyalty Programs: Incentivizing customers to return.

Related Benchmarks

LTV Benchmarks LTV data by industry What is CAC? Customer Acquisition Cost definition

Frequently Asked Questions

By Benchmarketing Research Team Reviewed by Performance Marketing Editorial Reviewed March 2026 · observations Q1 2023 – Q4 2024