Which statement about LTV is true?

• A. LTV is the total revenue for all customers
• B. LTV is the average revenue per customer over a specified period
• C. LTV is the cost to acquire a customer
• D. LTV is the total marketing spend per customer

Answer: (B)

LTV measures the value a customer brings over time. It captures how much revenue you can expect from an average customer across a chosen time horizon, which makes it a practical way to assess how profitable a customer relationship will be. Thinking in terms of a per-customer value over a period helps you compare what that customer is worth to the business with how much you spend to acquire and serve them.

That’s why this option is the best fit: it expresses value on a per-customer basis within a defined window, aligning with how teams gauge profitability and make investment decisions. The other ideas mix up what LTV represents: total revenue across all customers isn’t per customer, the cost to acquire a customer is CAC, and total marketing spend per customer describes spending, not the revenue value generated by the customer.