CAC measures the cost to acquire a customer; LTV measures what?

CAC measures the cost to acquire a customer; LTV measures what?

• A. Net profit from a customer over their lifetime
• B. Total marketing spend across campaigns
• C. Average order value
• D. Number of product features

Answer: (A)

Lifetime value measures the total value a customer brings to the business over the entire relationship, typically viewed as the net profit from that customer across all their purchases and interactions. It captures long-term profitability, not just a single sale or upfront spending. That’s why it’s the best choice: it reflects the enduring value a customer contributes, guiding how much you can afford to spend to acquire and retain them. The other options don’t fit because they represent either acquisition costs in total, a one-time per-sale metric, or an unrelated attribute.

Lifetime value measures the total value a customer brings to the business over the entire relationship, typically viewed as the net profit from that customer across all their purchases and interactions. It captures long-term profitability, not just a single sale or upfront spending. That’s why it’s the best choice: it reflects the enduring value a customer contributes, guiding how much you can afford to spend to acquire and retain them. The other options don’t fit because they represent either acquisition costs in total, a one-time per-sale metric, or an unrelated attribute.