Glossary
Customer Lifetime Value (LTV) Explained
LTV tells you how much a customer is 'worth'. It determines how much you can afford to spend on marketing.
01.The Formula
LTV = (Average Revenue Per User) / (Monthly Churn Rate).
Frequently Asked Questions
Why is 3:1 the golden ratio?
It ensures you have enough margin to cover operating costs and still make a profit after paying for marketing.
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