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SaaS metrics

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.

AI-generated
CRM · Note on the account record

[Phano] €85,000 ARR, critical · Health 34/100

June 1, 2026

→ Escalate to the sponsor

  • Silent for 28 days on email
  • Renewal in 22 days, quote not opened
  • No meeting scheduled in 6 weeks
See the diagnosticRelevantNot relevant

+ custom fields: phano_phase, phano_confidence, phano_health_score…

History on this account

[Phano] €85,000 ARR, high · Health 47/100

May 25 · → Schedule a sponsor touchpoint

[Phano] €85,000 ARR, medium · Health 58/100

May 18 · → Monitor decision-maker engagement

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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.

How do you calculate LTV?

Average revenue per customer times gross margin, divided by the churn rate. A steering approximation, not an accounting truth.

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