Glossary

Customer lifetime value (LTV)

metrics & financeUpdated October 2026 · reviewed by the Forge team

also known as LTV · CLV · lifetime value

The total revenue an agency expects to earn from a client over the whole relationship. A core input for how much you can afford to spend winning clients.

For example, a client on a $3,000 retainer who stays for an average of three years is worth roughly $108,000 in lifetime value. That figure tells you how much you can sensibly invest in winning and keeping a client like them.

Why it matters to your firm: LTV reframes a client from a monthly invoice into a long-term asset, and pairs with acquisition cost to show whether growth is actually profitable. Lifting LTV - through lower churn or expansion - compounds an agency's value faster than almost anything else.

What good looks like

Aim for an LTV at least 3x your acquisition cost; lifting it through lower churn or expansion compounds an agency's value faster than almost anything else.

How to calculate

LTV = average monthly revenue per client × average client lifespan in months

Lower churn lengthens the lifespan, so it raises LTV directly.

Customer lifetime value calculator

Plug in your numbers - it updates as you type.

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Customer lifetime value$108,000
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Common questions

Frequently asked questions

What is customer lifetime value (LTV)?

The total revenue an agency expects to earn from a client over the whole relationship. A core input for how much you can afford to spend winning clients.

How do you calculate customer lifetime value?

Multiply the average monthly revenue per client by how many months a client stays on average; lower churn raises both.

What is a good LTV to CAC ratio?

A common benchmark is an LTV at least three times the cost to acquire the client - below that, growth tends to lose money.

How do you increase customer lifetime value?

Reduce churn, expand accounts through upsell, and raise prices toward the value delivered - each lengthens or deepens the relationship.

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