Customer Lifetime Value (LTV) is a metric that estimates the total revenue a business can expect from a single customer account throughout the entire business relationship. It helps businesses understand the long-term value of customers and informs strategies for customer acquisition, retention, and service improvement. LTV can be computed using various methods, but a common approach involves calculating the average purchase value, multiplying it by the average purchase frequency rate to determine customer value, and then multiplying this by the average customer lifespan. This gives an estimate of the total revenue expected from a typical customer over their entire relationship with the business. The customer's expected lifespan is inversely related to [[churn]]. A sustainable business model requires LTV to be significantly greater than the [[customer acquisition cost (CAC)]].