Question one of the six, and the one that decides whether the other five even matter: what's your average customer LTV?
Ask an executive and you'll usually get a number back fast. It just won't be this one. You'll get ACV. You'll get MRR. You'll get the average deal size from the last board deck. All real numbers, all useful, and none of them the answer to the question.
Lifetime value is different in kind, not just in formula. ACV tells you what a customer agreed to pay. LTV tells you what the relationship is actually worth, and the gap between those two numbers is where every other question in this series lives.
The Number Every Business With Customers Already Has
There's no qualifying criteria here. Not a SaaS thing, not a subscription thing, not an enterprise thing.
If you have a customer, that customer has a lifetime value.
The only question is whether you know it. A services firm has an LTV. A license shop has an LTV. A company that swears it's not a recurring revenue business has customers who come back, buy again, refer others, and stop at some point, which means it has lifetimes and it has value per lifetime. The number exists whether or not anyone is looking at it.
Why It Compounds Twice
The mechanics are simple: how long a customer stays, times what they spend while they're with you. Which means there are exactly two ways to grow it, and here's the part most companies miss: the two ways feed each other.
Deliver value and orchestrate what comes next, and customers stay longer. That's the first compounding. But a customer who stays longer doesn't just keep paying the same number for more months. A longer lifetime is more milestones reached, more readiness moments, more of the catalog they have time to grow into. They stay longer and they buy more across the longer stay. The number compounds twice, and companies that only manage retention are collecting exactly half of that.
What Not Knowing Costs
Without LTV, every downstream decision is guesswork wearing a spreadsheet. You can't say what a customer is worth, so you can't say what acquiring one should cost. You can't say whether expansion is working, because there's no baseline to expand from. And you can't set the counterfactual target, the number your base should be producing, because that math starts with this number.
You can't miss a target that doesn't exist. That's not relief. That's the problem.
This is question one for a reason. Answer it and the other five have something to stand on. Skip it and you're optimizing motions you can't measure toward an outcome you can't see.
You can't grow a number you don't track. Most executives can answer two of the six questions. Start with this one, because every dollar in the other five is denominated in it.
Lincoln Murphy formally named and popularized Customer Success starting in 2010 and has spent 15 years connecting it to expansion revenue and commercial outcomes. Read The Premise.