Customer Lifetime Value Calculator
Estimate the total revenue a customer brings over time.
Results update as you type.
How it works
A customer lifetime value calculator estimates how much revenue a typical customer will bring across the entire time they do business with you, not just on their first purchase. You enter the average order value, how many times a customer buys per year, and how many years the relationship typically lasts, and the tool multiplies them into a lifetime value, along with the yearly value that underpins it. This number reframes how you think about marketing spend. A first sale might barely cover its acquisition cost, but if that customer returns four times a year for five years, their true worth dwarfs the initial order, which justifies investing far more to win and keep them. Lifetime value is the counterweight to cost per acquisition: the ratio between the two, often called the LTV to CAC ratio, is one of the clearest indicators of a sustainable business, with healthy companies typically earning several times more from a customer than they spent acquiring them. Understanding LTV changes decisions across the board, from how much you can afford to bid on ads, to whether a loyalty program or better onboarding pays for itself, to which customer segments deserve the most attention. Ecommerce brands, subscription businesses, agencies and founders use a customer lifetime value calculator to set acquisition budgets, model the payoff of retention efforts, compare the worth of different customer groups, and make the case that keeping existing customers is usually cheaper and more profitable than endlessly chasing new ones. It turns a single transaction into a long-term view of value.
LTV = average order value × purchases per year × lifespan in years
This lifetime value formula multiplies three drivers of long-term revenue: how much a customer spends per order, how often they buy in a year, and how many years they stay. The product is the total revenue a typical customer generates across the whole relationship, while the first two terms alone give their annual value. It is a revenue-based view rather than a profit one, so it deliberately ignores margins and discounting, giving a clean, comparable estimate of how valuable retaining a customer really is.
Source:Standard marketing metric (customer lifetime value)
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter average order value, purchases per year and customer lifespan.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Lifetime value updates instantly as you type — no button to press.
Frequently asked questions
What is customer lifetime value?
Customer lifetime value, often abbreviated LTV or CLV, is the total revenue you expect a customer to generate over the whole span of their relationship with your business. Instead of judging a customer by a single purchase, it accounts for repeat buying across months or years, revealing their true worth. This longer view is essential for deciding how much you can invest to acquire and retain customers, since many relationships only become profitable after several repeat orders.
Why is LTV important for marketing?
LTV sets the ceiling on what you can profitably spend to acquire a customer. If a customer is worth twelve hundred dollars over five years, you can afford a far higher acquisition cost than if they were worth sixty. It also highlights the payoff of retention: small increases in how long customers stay or how often they buy can lift LTV substantially. Comparing LTV to acquisition cost is one of the strongest signals of whether growth is sustainable.
What is a good LTV to CAC ratio?
A widely cited benchmark is roughly three to one, meaning a customer is worth about three times what it cost to acquire them. A ratio near one to one suggests you are barely breaking even and have little room for other costs, while a very high ratio may mean you are underinvesting in growth and could spend more to acquire faster. The right target depends on margins, but three to one is a common healthy starting point.
How can I increase customer lifetime value?
Lift any of the three drivers: raise average order value through bundles, upsells and cross-sells; increase purchase frequency with reminders, subscriptions and loyalty incentives; and extend the customer lifespan by improving product, support and onboarding so people stay longer. Reducing churn is especially powerful because it multiplies through every future purchase. Even modest gains in each factor compound, since lifetime value is the product of all three rather than the sum.
Does this calculator account for profit margin?
No, this version estimates lifetime revenue rather than lifetime profit. It multiplies order value, frequency and lifespan to show the total a customer spends, which is ideal for comparing customer segments and setting acquisition ceilings on a revenue basis. To get lifetime profit, you would multiply the result by your gross margin, subtracting the cost of goods and service. Many teams track both, using revenue LTV for planning and margin-adjusted LTV for profitability.