LTV, lifetime value (sometimes CLV, customer lifetime value), is the total net revenue a customer is expected to generate over their entire relationship with a business.
Definition
LTV, lifetime value (sometimes CLV, customer lifetime value), is the total net revenue a customer is expected to generate over their entire relationship with a business. In iGaming it is usually calculated as the cumulative net gaming revenue — deposits minus withdrawals minus bonuses and their cost — a player produces from first deposit until they churn, and it is the single most important number for deciding how much can be spent to acquire that player.
LTV is always an estimate, because most players have not finished their lifetime yet. It is projected from cohort data: take players acquired far enough in the past that their curve has mostly flattened, model the shape of cumulative revenue over time, and apply that shape to newer cohorts.
The projection is only as good as the cohort data and the assumption that new cohorts will behave like old ones.
In context
The core use of LTV is the acquisition equation: if the projected LTV of a player from a given source is $180 and the fully-loaded cost to acquire one is $110, the source is profitable with a comfortable margin; if acquisition cost is $200, it is not. Operators set target CPA and RevShare terms per GEO and per source based on segmented LTV, because a player from Tier-1 organic search and a player from a Tier-3 push campaign have very different lifetime values and cannot be paid for at the same rate.
LTV also drives retention investment. If improving day-30 retention by a few points lifts cohort LTV by $30, and it costs less than that to run the CRM programme that achieves it, the investment pays.
Affiliates on RevShare deals care about LTV directly, because their commission is a share of it over time; affiliates on CPA care indirectly, because a brand with poor LTV will eventually cut CPA rates or tighten qualification. The main pitfalls are over-optimistic curve projection, ignoring bonus cost in the revenue figure, and using a single blended LTV instead of segmenting by source and GEO.
Worked example
An operator projects segmented 12-month LTV at $210 for organic, $150 for SEO-affiliate and $90 for push-affiliate players. It sets CPA caps of $130, $95 and $55 respectively, and when a push partner's cohorts start projecting toward $70, it cuts that CPA to $45 rather than keep acquiring at a loss.
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