# What is LTV / CLV – Customer Lifetime Value?

What is LTV / CLV – Customer Lifetime Value? Total expected profit from a customer over the entire relationship. A healthy LTV:CAC ratio is 3:1.

## How it works in practice

LTV is the 'lens' that reshapes every decision. LTV of $220 versus CAC of $40 is an excellent deal.

## Related metrics

- CAC — the LTV:CAC ratio
- Churn Rate — high churn means low LTV
- Retention — improving retention multiplies LTV
- AOV — LTV = AOV × frequency × years

## Common misconception

'LTV is theoretical.' Klaviyo calculates LTV automatically for every customer. Export orders and group by customer.

## How to fix it

Low LTV? (1) improve the post-purchase experience, (2) run a win-back campaign, (3) launch a loyalty program, (4) note that a one-time product means low LTV by definition.

## Real-world example

A coffee shop: LTV was $105. A subscription option raised LTV to $340. Converting 30% of customers to subscriptions doubled revenue (2.1x).

## Where to start

Calculate LTV now: export 24 months of orders and group by email.

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Category: Finance · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/ltv-clv-customer-lifetime-value