The total profit or revenue a customer generates over the relationship.
Definition
The total profit or revenue a customer generates over the relationship.
Why it matters
It determines how much you can spend to acquire customers.
How it works
LTV ≈ average order value × purchase frequency × lifespan × margin
Example
A customer buying ₹1,000 four times a year for two years at 40% margin has LTV of about ₹3,200.
Common mistake
Using revenue instead of margin.
Using it in practice
Review Customer Lifetime Value alongside related metrics rather than in isolation, and agree definitions across your team so reports stay consistent.
Need help putting this into practice?
Gravmo's team can plan and run this for you. See D2C Performance Marketing or message us on WhatsApp.
Ask on WhatsAppFrequently asked questions
Is Customer Lifetime Value the most important metric?
No single metric tells the whole story; use it with business outcomes.
How often should we review Customer Lifetime Value?
Monthly for most businesses, weekly during active campaigns.
