How to Calculate Customer Lifetime Value

how-to-calculate-customer-lifetime-value

Customer lifetime value (LTV) is one of the most important metrics to measure at any growing company.

By measuring LTV in relation to cost of customer acquisition (CAC), companies can measure how long it takes to recoup the investment required to earn a new customer -- such as the cost of sales and marketing.

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And the metric itself tells companies how much revenue they can expect one customer to generate over the course of the business relationship -- which is something customer support and success teams have direct influence over.

The longer a customer continues to purchase from a company, the greater their lifetime value becomes. And customer support reps and customer success managers, who play key roles solving problems and offering recommendations that make customers decide to stay loyal to a company -- or to churn.

Learn more about calculating LTV across different industries using these case studies from Kissmetrics in the infographic below. Next, read our guide to learn more about customer retention

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