Predicted lifetime value
Also called pLTV.
An estimate of the total revenue a customer will produce over the whole relationship, rather than on the first deal, used as the value sent back to a platform.
Why it matters
In subscription and repeat-purchase businesses the first deal understates the customer badly, and bidding on it buys the wrong ones. In one-off transactional businesses it is the same number as the deal.
What goes wrong
The risk is compounding uncertainty. A day-0 estimate of a first deal is already an estimate; an estimate of three years of renewals on top of it can be confident-looking and almost entirely constructed. If the horizon is longer than your data, the honest move is a shorter horizon.
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The rest of this step
Measure this on your own data
The diagnostic reads a CRM export in your browser and reports your volume, your match rate and the spread between your leads against the thresholds in this glossary. Nothing is uploaded and no account is needed.