Glossary · L
Lifetime Value (LTV)
Definition
What is Lifetime Value (LTV)?
Lifetime Value estimates the cumulative value a customer will generate over their relationship with a brand. Models vary by revenue, margin, retention, and time horizon.
Business context
Why does it matter?
LTV informs acquisition limits and retention investment, but optimistic assumptions or revenue-only models can justify spending that the underlying margin cannot support.
Decision prompts
Three questions to ask in practice
- 01
Which business outcome does this metric or practice represent?
- 02
Are data sources and attribution rules consistent?
- 03
What adjacent metric could be harmed while this one improves?
Understanding the term is the start. Making the tradeoff is the work.
If you are evaluating Shopify Plus, headless architecture, growth systems, or cross-market operations, Tenten can help frame the decision.