LifeTime Value often termed as LTV or Customer Lifetime Value (CLV or CLTV) is the total revenue spent (or expected to be spent) by the customer in a business relationship. In subscription economy, the initial deal value is lesser as compared to traditional businesses.
Hence, LTV helps to compensate the Customer Acquisition Cost (CAC). It’s one of the key metrics of Customer Success Managers to increase revenue. Customer Success Managers are responsible to On board the customers, enable the product usage, track customer health and help him achieve the Desired Outcome.
Once the customer is set to success, he is likely to renew the subscription and buy more stuff. There can be multiple ways to increase LTV:
- Reduce Churn
- Up Sell/Cross Sell