Customerlifetime value
The total gross profit you expect from a customer over the time they stay.
Growth Score · Unit Economics
Definition
What it means
Lifetime value is often estimated as average revenue per customer times margin divided by churn rate. It depends on assumptions, so keep it conservative.
A common guide is to earn several times the cost of acquiring a customer.
Unit Economics
Why it matters, with an example
It tells you how much you can afford to spend to win a customer, so spend rests on what a customer is worth and not on a hope.
05 = $700 of expected gross profit.
In Growth Score
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Guides that cover it
Unit Economics
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FAQ
Quick answers
What is Customer lifetime value?
The total gross profit you expect from a customer over the time they stay.
Where does it sit in Growth Score?
It belongs to the Unit Economics pillar, one of the 12 pillars your score is built from.
What should I read next?
Start with Customer acquisition cost and Churn rate, then browse the other terms in Unit Economics.
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