Customer Lifetime Value Calculator

What is the Customer Lifetime Value Calculator?

Estimate customer lifetime value (LTV) and compare it with acquisition cost. Lifetime value puts a dollar figure on a customer relationship, which tells you how much you can sensibly spend to acquire and keep one.

How to use the Customer Lifetime Value Calculator

1. Enter your average order value, your purchases per year, your customer lifespan, your gross margin and the remaining fields.
2. Results update automatically as you type; you can also press Calculate.
3. Read the output: lifetime value (profit), lifetime revenue, ltv : cac ratio.
4. Use the 📊 chart to see the result visually, then copy or share it.

Formula and method

Worked example

With average order value = $60, purchases per year = 4, customer lifespan = 3 years, gross margin = 50 %, cac = $80, the Customer Lifetime Value Calculator returns lifetime value (profit): $360.00; lifetime revenue: $720.00; ltv : cac ratio: 4.50 : 1.

Where the Customer Lifetime Value Calculator helps in real life

You run a coffee subscription. With a $25 average order, monthly purchases and customers staying about two years, the calculator estimates the gross profit each subscriber brings in over that time.

You are deciding whether a loyalty program is worth it. If it adds even a few months to average lifespan, LTV shows how much extra profit that creates per customer.

Common mistakes to avoid

• Using revenue instead of gross margin, which inflates LTV.
• Guessing customer lifespan without checking real churn data.
• Applying one average LTV to very different customer segments.
• Ignoring discounts and refunds in the average order value.

💡 Practical tip: Compare LTV with your acquisition cost; a ratio near 3:1 is a common rule of thumb for a healthy business.

Tips for better results

• Estimate lifespan as 1 ÷ annual churn rate when you have churn data.
• Calculate LTV separately for your best acquisition channels.
• Revisit the number every quarter as you gather real retention data.

⚠️ Revenue estimates depend on your traffic quality, niche and ad network policies; actual earnings will differ.

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