Retention

LTV

Lifetime Value — the total profit a customer is expected to generate across their relationship with the brand. We model it from repeat purchase rate and average order value, and use it to set an affordable CAC.

Related Terms

Acquisition→

CAC

Customer Acquisition Cost — the marketing spend required to acquire a new customer. Healthy CAC is judged relative to LTV: a 3:1 LTV-to-CAC ratio is a common benchmark, but the right target depends on margin and payback period.

Retention→

AOV

Average Order Value — the mean revenue per order. Lifting AOV through bundling, free-shipping thresholds, or post-purchase cross-sell is often the cheapest way to improve ROAS without touching ad spend.

LTV

CAC

AOV

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