LTV (Lifetime Value)
The total revenue a customer is expected to generate over the whole relationship. Used to decide how much you can spend to acquire them.
Related terms
ACoS (Advertising Cost of Sale)
Ad spend divided by revenue, expressed as a percentage. It is the inverse of ROAS; lower is better.
AOV (Average Order Value)
The average amount spent per order, calculated as total revenue divided by the number of orders.
Break-even ROAS
The minimum ROAS needed to cover costs before making any profit, equal to one divided by the profit margin.
Conversion Rate (CR)
The share of clicks or visitors that complete a desired action, calculated as conversions divided by clicks.
CPA (Cost per Acquisition)
The average cost to generate one conversion, calculated as total ad spend divided by the number of conversions.
CPC (Cost per Click)
The average price paid for each click on an ad, calculated as ad spend divided by clicks.