What is pLTV?

• A. It measures past revenue
• B. It stands for Profit Lifetime Value
• C. It is identical to total LTV
• D. It predicts future revenue based on transactions and behaviors

Answer: (D)

pLTV is a forward-looking estimate of the revenue a customer will generate over their relationship with the business. It uses current and historical data—past purchases, frequency, monetary value, churn signals, and other behaviors—to forecast future transactions. Because it focuses on predicting future revenue rather than tallying what has already happened, it’s a planning tool that helps determine how much to invest in acquiring or retaining customers. The description that it predicts future revenue based on transactions and behaviors best captures how pLTV is used. The other ideas describe past revenue, misdefine the term, or equate it with historical LTV rather than forecasting.