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What is Lifetime Value (LTV)?

Lifetime Value (LTV) - a metric that represents the total revenue a customer will generate for a business during their lifetime. By understanding this metric, businesses can make informed decisions on how much to spend on acquiring new customers versus retaining existing ones.

Calculating LTV involves taking into account various factors such as customer acquisition costs, average purchase value, and customer retention rates. This allows businesses to determine which customers are most valuable over time and allocate resources accordingly.

Ultimately, LTV helps businesses to maximize long-term profits by focusing on sustainable growth strategies rather than short-term gains.