Customer Lifetime Value (LTV)
Total revenue a customer generates over their entire lifetime.
Definition
Customer Lifetime Value estimates the cumulative revenue a customer brings before leaving, combining their average recurring revenue, margin and expected lifetime. Compared with acquisition cost (CAC), it indicates whether the business model is viable.
Why it matters
Extending lifetime by reducing churn mechanically increases LTV: this is the direct stake of Customer Success. The Account Manager, in turn, grows it through expansion.
How Phano helps you
By acting on retention and expansion from the same signals, Phano works on both levers of LTV.
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Frequently asked questions
What is Customer Lifetime Value (LTV)?
Customer Lifetime Value estimates the cumulative revenue a customer brings before leaving, combining their average recurring revenue, margin and expected lifetime. Compared with acquisition cost (CAC), it indicates whether the business model is viable.
Why does Customer Lifetime Value (LTV) matter?
Extending lifetime by reducing churn mechanically increases LTV: this is the direct stake of Customer Success. The Account Manager, in turn, grows it through expansion.
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