LTV (Lifetime Value) is the total revenue a customer generates over their entire relationship with your company. The basic formula is: average ticket x purchase frequency x average retention time. Example: if the average ticket is R$ 5,000/month and the customer stays an average of 12 months, the LTV is R$ 60,000.
LTV matters because it determines how much you can sustainably invest to acquire a customer (CAC). The general rule is that LTV should be at least 3x CAC. If your LTV is R$ 60,000, you can invest up to R$ 20,000 to acquire that customer without compromising margins.
For Response Marketing, LTV is especially relevant because it justifies long-term investments. If SEO and GEO returns take 6 months to show up but generate high-LTV customers, the investment pays for itself with room to spare. Companies that focus only on immediate cost, without considering LTV, tend to underinvest in organic.