Also called LTV, CLV
Customer lifetime value is the total revenue one customer produces across the whole relationship, not just the first purchase.
LTV is the number that says how much acquiring a customer may cost. If a buyer is worth €140 over two years, spending €30 to find them is sound; if they are worth €19 once, it is not. Without LTV, every acquisition decision is a guess.
It is also the argument for repeat products. A creator selling one €39 item has an LTV of €39 minus fees; the same creator with a second and third offer can multiply that with no new audience at all.
Estimating it early is unavoidable and imprecise. Use a conservative window — twelve months rather than "lifetime" — and revise as real data arrives.
In practice
Average order €45, average 2.4 orders per buyer, 88% margin gives roughly €95 of contribution per customer — the ceiling on acquisition cost.
Common mistake
Computing LTV over an unlimited horizon. It flatters the number and licenses acquisition spending the cash flow cannot support.
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