Customer Lifetime Value (LTV)

客户生命周期价值（LTV）Marketing Terms

In one sentence

The total revenue or profit a brand expects to generate from a customer throughout their business relationship.

Customers who make repeat purchases and stay longer have higher lifetime value, justifying higher acquisition and service investments.

Ways to increase LTV include driving repeat purchases, increasing average order value, extending retention, and generating customer referrals.

Example

If a customer averages 3 orders per year at 2,000 RMB per order across a 3-year relationship, their lifetime value is approximately 18,000 RMB.

Customer Acquisition Cost (CAC): The average cost to acquire a new customer, calculated by dividing total sales and marketing spend over a given period by the number of new customers acquired.
Repeat Purchase Rate: The percentage of total purchasing customers who buy again within a given timeframe.
Private domain traffic: A customer audience that a brand can repeatedly reach directly without paying per touchpoint, such as WeCom contacts, community groups, and WeChat Official Account followers.