← The sales analytics libraryPractice · 16 questions →
Customer economics
Customer lifetime value
The gross profit a customer generates over their whole relationship: revenue per period, times gross margin, divided by churn.
Owned by: Senior sales analystTest band: Senior sales analyst
The formula
LTV = Revenue per period × Gross margin % ÷ Churn rate
In practice
Use gross margin, not revenue. And segment it: an enterprise customer's LTV and an SMB customer's are different businesses.
More in customer economics
Run a business, not a sales team? Wauvel reads your revenue by customer and month, straight from your QuickBooks.
$99/mo, everything included. Free for 14 days, no card.