● E-commerce
LTV (Customer Lifetime Value)
Total revenue generated by a customer over their entire relationship with the brand. The central metric for long-term profitability.
Full definition
Customer Lifetime Value (CLV or LTV) represents the total revenue a customer generates for a business over their entire commercial relationship. It is the most structuring metric for guiding acquisition, retention, and product strategy: it determines how much a company can afford to spend on customer acquisition while remaining profitable.
Simplified formula: LTV = Average Order Value × Annual Purchase Frequency × Customer Lifespan (years). A margin-adjusted version: LTV = (AOV × Frequency × Lifespan) × Gross Margin. LTV is always interpreted in relation to customer acquisition cost (CAC): an LTV/CAC ratio above 3 is considered healthy in e-commerce.
Benchmarks vary widely: in FMCG, an LTV of €200-500 is common; in luxury or high-end electronics, it can exceed €2,000. Brands that invest in the post-purchase experience — order tracking, review responses, loyalty programs — typically see LTV improve by 20-40% compared with brands that neglect this dimension.
Concrete example
A cosmetics brand finds that its customers place an average of 3.2 orders per year at an AOV of €58, over a relationship lifespan of 2.5 years. Its gross LTV is therefore 3.2 × €58 × 2.5 = €464. With an average CAC of €35, the LTV/CAC ratio stands at 13.3 — well above the profitability threshold of 3.
When this same brand introduces a post-purchase review program with systematic responses and cross-sell offers triggered by 5-star reviews, purchase frequency rises to 4.1 orders per year and relationship lifespan to 3.1 years. The new LTV reaches 4.1 × €58 × 3.1 = €737 — a 59% increase without any change to the CAC.
With Review Collect
Review Collect improves LTV across three dimensions. First, a 40% post-purchase review collection rate deepens post-purchase engagement and builds emotional connection with the brand, increasing purchase frequency. Second, AI-generated responses delivered in under 60 seconds demonstrate brand presence that drives long-term loyalty.
Third, the MONETISE feature increases AOV by +73% on post-review transactions, directly impacting the AOV component of the LTV calculation. Over three years, these three levers combined can double the LTV of an acquired customer, without increasing the acquisition budget.
