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LTV (Lifetime Value)

Total revenue a customer brings over time

What is LTV (Lifetime Value)?

The total revenue a single customer generates during their entire relationship with your brand. In Web3, this could mean token purchases, governance participation, and referrals. If your LTV is 3x your CAC, you have a sustainable business.

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In plain words

"Think of it like the total tip a regular leaves over years of visiting your café."

How it works

LTV grows at every stage of the customer journey

Key takeaways

  • Includes all revenue, not just the first purchase

  • Pair with CAC — your LTV:CAC ratio should exceed 3:1

  • Segment by cohort for accurate numbers

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Real-world example

A subscriber pays $29/mo for your newsletter and stays 14 months on average. They also buy a $99 course. Their LTV is roughly $505. That number tells you how much you can afford to acquire someone like them.

Related terms

CAC (Customer Acquisition Cost)

How much it costs to acquire one customer

ROAS (Return On Ad Spend)

Revenue generated per dollar spent on ads

Retention

Keeping users engaged over time

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