💎 Customer Lifetime Value Calculator
Customer lifetime value (CLV or LTV) estimates how much gross profit an average customer brings in over the whole relationship.
How the Customer Lifetime Value Calculator works
Average order value times orders per year gives yearly revenue per customer. Multiplying by gross margin and by the number of years a customer stays gives lifetime gross profit.
Step-by-step calculation
- 1Enter average order value and orders per year.
- 2Enter gross margin and years as a customer.
- 3Multiply them together.
- 4Compare with acquisition cost.
Worked example
A $50 average order, 4 orders a year, 60% margin and 3 years: CLV = 50 × 4 × 0.60 × 3 = $360. With a $100 acquisition cost, LTV:CAC is 3.6.
Customer Lifetime Value Calculator examples
| Average order value ($) | Customer lifetime value |
|---|---|
| 25 | $180.00 |
| 38 | $273.60 |
| 50 | $360.00 |
| 63 | $453.60 |
| 75 | $540.00 |
Other inputs kept at the calculator's default values. Results calculated by this calculator.
Why use a Customer Lifetime Value Calculator?
Decide how much you can spend to win a customer.
Important factors that can affect your results
- Churn changes lifetime.
- Margin vs revenue.
- Discount rate for future value.
Frequently asked questions
What is a good LTV:CAC ratio?
Many businesses aim for about 3:1 or better. Below 1:1 means each new customer loses money.
Why use margin instead of revenue?
Because the cost of the goods you sell is not available to spend on marketing.
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Last reviewed November 2026 · How we build and check our tools · Report a problem