Customer Lifetime Value (CLV): Calculation, Strategy, and Optimization

Lifetime Value (LTV) is a critical metric estimating total revenue from a customer over their entire relationship with a business. LTV guides customer acquisition spending, marketing focus, product strategy, and retention efforts, with a healthy LTV-to-CAC ratio typically cited as 3:1. Different calculation methods apply depending on business model, and LTV should be segmented by acquisition channel, persona, and pricing tier to avoid misleading conclusions.