Customer Lifetime Value Customer lifetime value (LTV) is a concept developed to consider the fact that it generally costs something to acquire customers and that the profits rely on retaining them over time. Consider the hypothetical data in Table 1.3 concerning customer profitability over a 3-year time frame:

Assume that your company has 100,000 initial customers. Estimate the LTV, which is defined as the cumulative net present value of the profits divided by the original number of customers. Use a discount rate of 15%.