Overview
LTV, or customer lifetime value, is the total profit a customer generates over the entire span of their relationship with a brand, across all their orders. It is the counterweight to customer acquisition cost.
On TikTok Shop, where impulse purchases are common, understanding LTV tells you how much repeat value a first sale really unlocks.
How it works
A simple LTV estimate multiplies average order value by purchase frequency by the customer's average lifespan, adjusted for margin. Higher repeat rates and AOV push LTV up.
Why it matters
LTV sets your acquisition budget. A high LTV lets you spend more to win a customer (higher commission, more ad spend) and still profit, which makes your creator program more competitive for the best creators.
How brands use it
Brands raise LTV through repeat-purchase tactics and bundles, then reinvest the headroom into acquiring more customers through creators.
