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Performance & Measurement
4 min read
LTV, or customer lifetime value, is the total profit you expect from a customer across the whole relationship, not just their first purchase. It reframes advertising from chasing cheap first sales to acquiring customers worth more over time — and it changes how much you can afford to bid.
Measure repeat behaviour. Track how often and how long customers keep buying.
Estimate margin. Apply your profit per purchase, not just revenue.
Project forward. Model the expected value over the relationship.
Feed it to acquisition. Let LTV set how much a customer is worth to win.
Retention. How long customers stay before churning.
Purchase frequency. How often they come back.
Average order value. How much they spend each time.
Margin. The profit left after costs.
Smarter bidding. High-LTV segments justify higher acquisition costs.
Better targeting. It points spend at customers worth keeping.
Sustainable growth. It guards against buying unprofitable customers.
Prediction risk. Future value is an estimate, not a fact.
Data maturity. New businesses lack the history to model it well.
Segment variance. Averages hide big differences between customers.
Feedback lag. It takes time to confirm predicted value was real.
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