Question: What does LTV measure?
- LTV is the predicted revenue that one customer will generate throughout their relationship with a company.
- LTV is a quick indicator of a customer's value relative to how much it costs to earn them.
- LTV is a marketing metric that measures the percentage of website visitors or users who complete a desired action, such as making a purchase.
- LTV is a metric that refers to the amount of money an advertiser pays for each click on their advertisement.
Explanation
LTV (Lifetime Value) measures the total predicted revenue a single customer will generate over the entirety of their relationship with a company. It accounts for repeat purchases, upsells, and retention over time. In HubSpot, LTV helps prioritize high-value customers and informs marketing, sales, and service strategies. It enables forecasting revenue and assessing the long-term impact of customer acquisition efforts. LTV is a forward-looking metric, focusing on potential future revenue rather than immediate transactions.
Why the other options are incorrect
Option B describes a cost-to-acquire comparison, not LTV itself.
Option C defines a conversion rate metric, unrelated to revenue prediction.
Option D describes cost-per-click, which is an advertising metric, not customer value.
Source for verification
HubSpot LTV Reporting
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