Business Metrics
LTV (Lifetime Value)
The total revenue a business can expect from a single customer account throughout their entire relationship. A key metric for understanding customer economics.
Biological Context
LTV parallels the total energy yield from a food source. Just as foragers evaluate patches by total expected return, businesses evaluate customers by lifetime value. High LTV justifies higher acquisition costs, longer sales cycles, and greater service investment.
Business Application
LTV/CAC ratio is a critical health metric. Ratios above 3:1 indicate sustainable economics; below 1:1 means losing money on each customer. Increasing LTV through retention, upselling, or cross-selling often beats reducing CAC.