Glossary · Compter l’argent

Customer lifetime value

Customer lifetime value is the total revenue a customer brings over the whole length of the relationship, not just at their first purchase. It is often abbreviated *LTV*.

Les quatre divisions qui décident si une campagne mérite un euro de plus. The forty terms of the trade

What it is for

It allows you to spend more than the first basket to win a customer. A €29-a-month subscription kept eighteen months is worth €522: accepting an acquisition cost of €90 becomes obvious, when it looked three times too expensive against the first payment. That is what separates funded growth from growth you merely endure.

How it is calculated

Average order value times the number of expected purchases, or the monthly fee times the observed lifetime. It therefore requires real history: a lifetime value calculated after three months of trading is a hypothesis, and had better be called one.

The classic mistake

Inflating it to justify a spend. A lifetime estimated at thirty-six months from six months of history allows budgets your cash flow will not follow — and the error only shows a year later.

Cost per acquisition

What a customer really brings

€29

The first payment. The only one most tools ever see.

18 months

The observed length of the relationship, not the hoped-for one.

€522

What you can genuinely set against an acquisition.

The figure it should be compared with

What Subtraq does with it

Subtraq does not calculate it: it needs a customer's full history, which lives in your billing tool. What it does provide is the customer's origin — which placement they came from, which lets you work out lifetime value per channel once the amounts are gathered.