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Try demoLTV (customer lifetime value) is the total gross profit a business expects from one customer over the whole time they stay a customer.
A simple estimate is average monthly revenue per customer times gross margin, divided by monthly churn. A $20 customer at 70% margin and 5% churn is worth about $280.
For AI products, gross margin is not fixed: provider costs depend on how much each customer uses. Credit-based pricing keeps margin predictable.
LTV is most useful next to CAC. A common rule of thumb is that LTV should be at least three times what it costs to acquire a customer.
Aikeedo’s profit calculator shows margin per plan from your credit rates and provider costs, the main input to LTV.
Discover more terms connected to this one
CAC (customer acquisition cost) is what you spend on marketing and sales to win one new paying customer.
Churn rate is the share of customers, or of recurring revenue, lost in a period, usually a month, through cancellations and failed renewals.
Gross margin is revenue minus the direct cost of delivering it, such as AI provider fees, hosting and payment fees, as a share of revenue.