Customer Lifetime Value (LTV) is a crucial metric for understanding the average total revenue a customer will generate over their relationship with a company, and it plays a significant role in guiding business decisions. For subscription-based businesses, calculating LTV involves metrics like churn rate and average revenue per customer (ARPC), with customer retention having a profound impact on increasing LTV. It is advised to start with a simple LTV formula and refine it over time, considering factors such as gross profit margins and customer acquisition cost (CAC) for a more comprehensive analysis. A healthy LTV to CAC ratio is typically 3:1, but organizations should also be prepared for fluctuations in LTV and focus on long-term trends rather than short-term variability. Effective communication and regular back-testing are essential for ensuring the accuracy and practical application of LTV calculations, ultimately aiding in strategic planning and investment in customer retention over acquisition.