Lifetime Value (LTV)

Lifetime Value (LTV) refers to the total revenue a business expects to earn from a customer throughout their relationship. It helps businesses understand the long-term value of each customer and aids in strategic decision-making for customer acquisition, marketing, and retention efforts.

LTV is calculated by estimating the average purchase value, frequency of purchases, and the average customer lifespan. A high LTV means a customer is worth more to the business over time, which justifies higher investments in customer acquisition.

For UAE-based businesses, especially those in subscription-based models, understanding LTV is key to achieving sustainable growth and profitability, ensuring that customer retention strategies are aligned with overall business goals.