Customer lifetime value is the profit one customer brings over the whole relationship — the number that tells you what you can spend to get one.
Lifetime value (profit)
–
Lifetime revenue
–
Profit per customer per year
–
Maximum cost to acquire a customer
–
What is the Customer Lifetime Value (LTV) Calculator?
Customer lifetime value (LTV or CLV) is the profit a customer brings over the whole relationship. It tells you how much you can afford to spend to win one.
Enter order value, purchase frequency, how long customers stay and your margin to estimate LTV and your maximum acquisition cost.
How to use the Customer Lifetime Value (LTV) Calculator
- Enter your average order value and purchases per year.
- Enter how many years a customer typically stays.
- Enter your gross margin and the share of LTV you are willing to spend to acquire a customer.
Understanding your results
- Lifetime value (profit)
- Order value × purchases per year × years × margin.
- Maximum cost to acquire
- The most you should pay for a new customer at your chosen share of LTV.
Frequently asked questions
How do I calculate customer lifetime value?
Average order value × purchase frequency × customer lifespan × gross margin.
What is a good LTV to CAC ratio?
3:1 or better is a common target — each customer returns three times what they cost.
How can I increase LTV?
Upsells, subscriptions, email follow-up and better onboarding keep customers buying longer.