Customer Lifetime Value. The total predicted revenue a customer will generate over their entire relationship with your brand.
LTV = Average Order Value × Purchase Frequency × Customer Lifespan. For D2C brands, LTV is the north star metric. A customer with $80 AOV who buys 4× per year for 2 years has a $640 LTV. Knowing this number determines how much you can afford to spend acquiring each customer (your maximum sustainable CAC). D2C brands should segment LTV by acquisition channel, cohort, and product category.
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