Customer Lifetime Value (LTV) Explained for Affiliates

A simple way to estimate LTV

The simplest version: average spend per period × number of periods a customer stays. If a typical customer spends a certain amount each month and stays for four months on average, their LTV is four times that monthly spend.

These numbers are made up to show the method. Your real figures come from the program's reporting. Many programs show earnings per referred customer over time, which is the data you need.

Why LTV matters to promoters

• Revshare: you earn a share of what customers spend over time, so your earnings per customer are directly tied to their LTV. See CPA vs revshare.
• Choosing sources: a source whose customers stay longer can be worth more than a source with more conversions that churn fast.
• Paid traffic: you can afford to pay more per customer when each one is worth more over time, which ROI vs ROAS explores.
• Patience: a revshare source can look weak in month one and strong by month four.

LTV against cost to acquire

LTV becomes most useful next to your cost to acquire a customer (CAC): everything you spent to get that customer, such as ads, shoutouts, tools and paid help. If what you earn from a customer over their lifetime is well above what it cost you to get them, the source is healthy. If it's below, you're paying to lose money, however busy it feels.

When you pay for traffic, track spend per source next to earnings per source. Cost per click explained and how to buy shoutouts cover the cost side.

How promoters attract higher-LTV customers

1. 1Promote honestly. People who know what they're getting stay longer than people who were hyped into it.
2. 2Target the right audience. Fans who genuinely like a creator, or players in the brand's legal countries who enjoy that kind of game, stay. Curious clickers don't.
3. 3Warm people up first. Followers of an owned channel convert later but tend to stay longer than cold clicks.
4. 4Compare sources by LTV, not only by conversion count, and move effort to the ones whose customers last.

For iGaming, never push people to spend more or chase losses. Promote licensed brands only, to adults in legal countries, with responsible-gambling messaging. A healthy customer base is one where people play for fun within their limits.

Tracking LTV over time

Group customers by the month they joined and by source. Each month, note how much each group has earned you so far. After a few months you can see which sources build value and which fade. This is called cohort analysis, and it's simpler than it sounds: one row per month joined, one column per month since.

You need source tracking on every link for this, so set it up with the tracking link builder if you haven't. AMZA's Wingman can show promoters how their referrals hold up over the weeks, which is the raw material for this view.