Lifetime value: what it means
DefinitionLifetime value, often shortened to LTV, is an estimate of the total revenue or profit one customer brings to a business over the whole time they stay a customer. It helps an owner decide how much effort and money is reasonable to spend winning and keeping someone.
How it works in a service business
A simple version multiplies the average amount a customer pays per visit by how many visits they make per year and how many years they typically stay. Using profit instead of revenue is more honest. The tradeoff is accuracy: new businesses lack history, and averages hide big differences between a one-time job and a weekly client. A common mistake is judging a lead only by the first job's price. A customer who pays a small amount each month for years may outweigh a larger one-time sale. Use it to compare marketing sources, justify a thoughtful follow-up, and decide what a referral credit can sensibly be. Recalculate yearly from your own records rather than borrowing industry numbers.
Example
A lawn owner finds that weekly mowing clients usually stay for several seasons, so spending effort on a friendly first visit and follow-up is worth more than the first invoice suggests.
Where Apex touches this
In progress
Part of this is built. The rest is not. Status as of 2026-10-07; the badge shows the least-built feature involved.
- LD18Customer lifetime value and spend view(In progress)
- RP13Customer retention reports(Built)
- RP19First-time vs repeat customers(Built)
Apex Flow Scheduler is in early access. See how we label status.