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Glossary
Product concepts

What is Customer Lifetime Value (LTV)?

Customer Lifetime Value (LTV) is an estimate of the total revenue a business will earn from a single customer throughout the entire duration of their relationship. It is a core metric for understanding long-term profitability and determining how much can be sustainably spent on customer acquisition.

When to use it

Teams use LTV to evaluate the health of their business model and prioritize product improvements that increase customer retention. It helps solve the problem of short-term thinking by shifting focus toward features that keep users paying for years rather than just months. Use it when calculating your customer acquisition cost (CAC) limits or projecting future revenue growth.

Example

A SaaS team observes that their average customer pays $50 per month and stays subscribed for 20 months, resulting in an LTV of $1,000. By analyzing cohort data, they find that users who utilize a specific 'OKR tracking' feature stay for 40 months on average, effectively doubling their LTV to $2,000. Based on this $1,000 increase in value per customer, the product manager decides to move OKR-related improvements to the top of the roadmap for the next quarter to drive higher lifetime revenue.

How Planet Roadmap helps with Customer Lifetime Value (LTV)

Planet Roadmap has a public feedback portal that allows you to segment feature requests, helping you prioritize the needs of high-value user groups that contribute most to your LTV.

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FAQ

How is LTV different from ARPU (Average Revenue Per User)?
ARPU is a snapshot of revenue generated per user in a specific time frame, like a month. LTV is a cumulative projection of that revenue across the entire multi-year relationship with the customer.
Why should product teams care about LTV over monthly revenue?
Focusing solely on monthly revenue can lead to building flashy features that attract new users but don't keep them. Tracking LTV encourages building deep, sticky value that reduces churn and increases the total return on every customer acquired.

Related terms

Customer Acquisition Cost (CAC)ChurnRetentionCohort AnalysisKPIProduct-Market FitTime to ValueNet Promoter Score (NPS)

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