The Lifetime Value Formula (LTVF) is a business tool used to measure and predict the total value of a customer to an organization. It’s calculated by taking the average purchase amount a customer makes in one year multiplied by the expected number of years that customer will continue to make purchases from the company. This formula can help businesses identify which customers are the most valuable and worth investing more resources into. By understanding the relationship between customer lifetime value and profitability, businesses can create strategies to get the most out of their customer base and maximize overall profits.