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Customer Lifetime Value (LTV) Calculator
Calculate how much a customer is really worth over their lifetime — then see exactly what raises it most. Free, private, no sign-up.
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Improvement scenarios
Your numbers
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Customer Lifetime Value (revenue)
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Gross profit LTV
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LTV : CAC ratio
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Orders / lifetime
What raises your LTV most
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What is customer lifetime value (LTV)?
Customer lifetime value (LTV, or CLV) is the total profit you expect from an average customer over the whole time they stay with you. It's the single most important number for deciding how much you can afford to spend acquiring customers — without it, you're guessing at ad budgets and growth.
The LTV formula
- LTV = Average order value × Purchase frequency (per year) × Customer lifespan (years) × Gross margin %
- Annual customer value = AOV × Purchase frequency × Gross margin %
- LTV : CAC ratio = LTV ÷ Customer acquisition cost
Leave gross margin at 100% if you want a revenue-based LTV; use your real margin for a profit-based LTV (the more useful number for budgeting acquisition).
Why LTV is the metric that matters most
Your LTV sets the ceiling on what you can profitably pay to acquire a customer. The widely used benchmark is an LTV:CAC ratio of 3:1 — earn at least three times what it costs to acquire. Below 1:1 you lose money on every customer; above 5:1 you may be under-investing in growth.
How to increase customer lifetime value
- Raise average order value — bundles, upsells, and cross-sells.
- Increase purchase frequency — subscriptions, reminders, and loyalty programs.
- Extend lifespan / reduce churn — better onboarding and retention compound LTV fastest.
- Improve margin — every point of margin flows straight into LTV.
Frequently asked questions
Should I use revenue or margin for LTV?
For deciding acquisition budgets, use gross margin — it reflects the actual profit a customer brings. Revenue-based LTV (100% margin) overstates how much you can spend to acquire them.
What's a good LTV:CAC ratio?
Around 3:1 is the healthy benchmark. Under 1:1 means you're losing money per customer; above 5:1 often means you could spend more on growth.
How do I find purchase frequency and lifespan?
Purchase frequency = total orders ÷ unique customers over a year. Lifespan ≈ 1 ÷ your annual churn rate. If unsure, estimate and try a few scenarios.
Is this private and free?
Yes — free, no sign-up, and the math runs entirely in your browser. Your numbers never leave your device unless you choose to email yourself the report.
