Lifetime Value (LTV)
In manufacturing, Lifetime Value (LTV) is the total net profit a business expects from its entire relationship with a customer.
This approach shifts focus from single machine sales to long-term service ecosystems. By offering maintenance, spare parts, and software upgrades over time, companies stabilize revenue and increase margins.
In B2B markets, high LTV is achieved through servitization, where manufacturers act as strategic partners to support clients' operational excellence throughout the product lifecycle.
FAQ
Why LTV is Essential in Modern Manufacturing Strategy
The growing importance of LTV in industrial markets reflects a shift from transactional sales to relationship-based business models. As global competition and commoditization increase, initial hardware sales often yield thin margins.
