LTV (Lifetime value)
LTV, or lifetime value, is the total gross margin a customer is expected to generate over their relationship with the business. It is typically modeled as ARPU times gross margin divided by churn, and it sets the ceiling on how much a company can profitably spend to acquire that customer.
In more detail
Healthy LTV modeling is cohort-based, segmented by acquisition source and product line, and grounded in actual retention curves rather than steady-state assumptions. Health businesses commonly model LTV per condition and pharmacy channel because refill economics differ sharply.
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