The Lifetime Value of a Customer (LTV) Formula is a calculation used to determining the total value a customer will bring to a business over the lifetime of their relationship. This valuable metric helps businesses plan better for the future, budget more effectively, and make more informed decisions about their marketing strategies. In order to calculate LTV, you’ll need to have data on customer purchase history, frequency of purchases, average sale amount, and the company’s projected retention rate. Taking these factors into account, you can determine an estimate of how much value each customer is likely to bring your business over time. The Lifetime Value of a Customer Formula gives companies powerful insight into their customers’ behavior, needs, and potential, allowing them to develop smarter strategies and maximize their business success.