Lifetime Value Model is an analytical tool used to assess customer relationships and determine how much future profit a company can reasonably expect from that relationship. To calculate lifetime value, companies use a combination of factors such as customer longevity, purchase frequency, average order value, potential referrals, and other data points. The information gathered allows for the modeling of customer behavior and the prediction of future profits over the lifetime of the customer’s journey with the company. With this predictive tool, businesses can make more informed decisions on when to invest in customer acquisition and retention initiatives. The results of such analyses are key to success in today’s competitive market.