LTV (Lifetime Value) is how much money an average customer generates throughout their relationship with you. It’s the metric that tells you how much you can invest to acquire each customer and still be profitable.
The simple formula
For subscriptions: LTV = Average revenue per customer per month ÷ Monthly churn rate
If your average customer pays $25/month and your monthly churn is 5%, LTV is 25 ÷ 0.05 = $500. That customer generates on average $500 before leaving.
Why it matters
If your LTV is $500 and it costs $50 to acquire a customer, you have a 10:1 LTV:CAC ratio. Excellent. If it costs $600, you’re losing money. Without knowing your LTV, you’re investing in marketing blindly.
How to calculate it with Stripe data
Stripe has all the information. Divide your MRR by active subscribers for average revenue. Count lost customers over total for churn. With those two numbers you have your LTV.
Segment to decide better
LTV by plan is more actionable than the average. A $10 plan with 8% churn (LTV = $125) vs a $50 plan with 3% (LTV = $1,667) tells you where to focus investment.
How to improve LTV
Two levers: increase average revenue (upgrades, annual plans) or reduce churn (better onboarding, payment recovery). Reducing churn by 1% usually has more impact than raising price by 10%.
Stripe Control gives you your real MRR, visible churn rate, and recovery tools to improve your LTV directly from the dashboard.
Keep reading
- The complete guide to recovering recurring revenue in Stripe
- Stripe retention strategies that actually work
- How to send a payment link to a customer with an expired card in Stripe