Definition
The total revenue one customer is expected to generate across the whole relationship, not just the first job. A higher lifetime value justifies spending more to win that customer and more to keep them, because the return is collected over years of repeat work rather than a single transaction.
What it looks like in practice
Take a made-up landscaping customer, purely to show the shape of the math. Say she signs up for weekly mowing through the season, adds spring cleanup and fall leaf removal, and stays about three years before moving. Her lifetime value is every one of those visits and add-ons added together, minus what it costs to deliver them, not the single mow that first brought her in. Looked at that way, the owner sees that the first job is barely a rounding error next to the seasonal work behind it, and that losing her in year one costs far more than the mow.
Why it matters
Thinking past the first sale changes what an owner is willing to do to earn and hold a relationship. When repeat business is strong, a higher acquisition spend and real effort on service both start to pencil, because the payback runs over years. The catch is that lifetime value is an estimate, not a fact; assume a longer relationship than you actually get and you'll happily overspend your way into trouble. It also isn't uniform: some customer types churn after one job while others renew for a decade. Read it alongside acquisition cost, and revisit it as your actual retention data comes in.