How it works
Specify horizon, revenue or margin and repeat-purchase assumptions; a forecast is not an observed fact.
Example
Example: A model uses actual repeat-purchase history and separates future estimates clearly.
Common mistakes
Different LTV models are not directly comparable.
How can you check this in practice?
Define the time horizon and whether value means revenue or contribution after costs. Use real cohorts and repeat purchases; make forecasting assumptions explicit. Do not supply unsupported future revenue as proven current conversion value.
Distinctions and limitations
Lifetime value is not a universal constant or average order value. Customers from different channels and periods can exhibit different repeat behaviour. Forecasts carry uncertainty and need comparison with actual outcomes.
Official sources
Editorial responsibility: Biser Bozhinov · PPC Specialist
Updated: 05/11/2026
For a correction or question: office@z-consult.bg