LTVCustomer Lifetime Value
Total gross profit you'll earn from an average customer.
Put this metric to work: explore FlowMRR's Stripe MRR analytics to track revenue movements, retention and forecasts from your own account.
The expected gross profit from a customer over their entire relationship. Disclose your margin assumption — LTV calculated on revenue (ignoring COGS) overstates economic value, sometimes 2–3×.
Formula
LTV = ARPU × Gross Margin ÷ Customer Churn RateWorked example
ARPU $200, gross margin 80%, monthly churn 2% → LTV = 200 × 0.80 ÷ 0.02 = $8,000.
Illustrative comparisons
LTV : CAC targetThese unsourced ranges are illustrative scenarios, not measured industry benchmarks, percentiles or recommended targets. Their qualitative labels are editorial interpretations. Compare your own cohorts using the same segment, period, currency and measurement basis.
Why it matters
LTV defines how much you can afford to spend acquiring a customer. Without LTV you're flying blind on CAC. The formula also exposes which lever to pull: raise ARPU (pricing), reduce churn (retention), or improve margin (efficiency). All three compound.
Common mistakes
- Using revenue instead of gross profit — at 80% gross margin, revenue-based LTV is 25% higher than gross-profit LTV.
- Using current churn for new cohorts that may behave very differently.
- Ignoring discount rate on multi-year LTV (less critical for SMB SaaS, big deal for enterprise).