How is the LTV of a single customer calculated?

The formula of calculating the LTV of a single customer isn't any different from LTV for the entire business. LTV helps marketers know if their marketing efforts are effective. Here is the formula:

Amount customer spends over the lifetime of the business relationship - Total customer cost

For examples, if the total amount the customer spends over the years is $500 and the total customer cost is $300 then the LTV is 500-300= $200.

It means that the company shouldn't spend over $200 to acquire a new customer otherwise it will get a loss.