Customer Lifetime Value Calculator
Calculate customer lifetime value (CLV/LTV). Estimate total revenue expected from a customer relationship.
Customer Lifetime Value (CLV or LTV) estimates the total revenue a business can expect from a single customer account throughout their relationship. This metric is essential for determining customer acquisition budgets.
Calculator
Common use cases
- Marketing budget allocation
- Customer acquisition strategy
- Customer segmentation
- Business valuation
How to use
- Enter average purchase value
- Input average number of purchases per year
- Estimate customer relationship length in years
- Add gross margin percentage for profit-based LTV
FAQ
How do I estimate customer lifespan?
Use churn rate: Lifespan = 1 / Churn Rate. If 20% of customers leave each year, lifespan is 5 years.
Should I use revenue or profit for LTV?
Profit-based LTV is more accurate for setting acquisition budgets. Revenue-based is useful for comparison.
What's a good LTV:CAC ratio?
Generally, LTV should be at least 3x CAC. Higher ratios indicate more efficient customer acquisition.
This calculator provides illustrative estimates for planning purposes only and does not constitute financial, tax, or legal advice.