Expected gross profit from a customer over their lifetime.
For subscriptions, approximate LTV with ARPU, gross margin, and churn.
Be consistent about gross vs net revenue and margin assumptions.
SMB: 3–5× CAC; Mid-market: 4–7×; Enterprise: 6–10×. Balance with payback speed.
ARPU $80, Gross margin 80%, Monthly churn 3% → LTV = (80×0.8)/0.03 ≈ $2,133.
Using revenue instead of gross profit; wrong churn input (logo vs revenue).
Mixing ARPA vs ARPU; ignoring contraction/expansion dynamics.
Financials slide with LTV/CAC and payback; add footnote on basis (gross margin).
Use net revenue churn for a more conservative view if expansion is material.