Define Lifetime Value (LTV) and explain its relationship to CAC in budgeting.

Define Lifetime Value (LTV) and explain its relationship to CAC in budgeting.

• A. LTV is the current monthly revenue per customer; budgeting should aim for LTV < CAC.
• B. LTV is the total revenue from a customer; budgeting should try to maximize CAC.
• C. LTV is the expected net profit from a customer over their lifetime; budgeting should aim for LTV > CAC.
• D. LTV is the number of purchases per customer; budgeting ignores CAC.

Answer: (C)