An estimate or measure of the value a customer contributes over a defined customer relationship.
A practical example
A subscription business compares customer cohorts using contribution after service costs rather than initial order revenue alone.
What to watch for
Specify whether LTV means revenue or contribution, the time horizon and retention assumptions. Forecast LTV is uncertain and can overstate affordable acquisition spend.
Related reading
Explore Cost Per Acquisition (CPA) and Average Order Value (AOV). Try our break-even ROAS calculator for a practical next step. See how this fits into Paid advertising.