Customer Lifetime Value Calculator
Calculate the total revenue and profit a customer generates over their entire relationship with your business.
* All calculations are approximate.
How Customer Lifetime Value Calculator Works?
Calculate the total revenue and profit a customer generates over their entire relationship with your business.
Enter the average purchase value per transaction.
Enter the purchase frequency — how many times a customer buys per year.
Enter the average customer lifespan in years.
Enter your profit margin percentage to calculate profit-based LTV.
The calculator multiplies these values to determine total revenue and applies the profit margin to get the lifetime value.
Formula Used
Annual Value = Avg Purchase Value x Purchase Frequency | Total Revenue = Annual Value x Customer Lifespan | LTV = Total Revenue x (Profit Margin / 100)
LTV is a forward-looking estimate based on averages. Segment your customers to get more accurate LTV figures for different cohorts, and always compare LTV against your Customer Acquisition Cost (CAC).
Important — Read Before You Decide
- LTV estimates assume customer behavior remains consistent
- Discount rates should be applied for long time horizons
- Churn rate dramatically affects actual LTV
- Different customer segments have vastly different LTVs
- Cross-selling and upselling can increase LTV significantly
- Customer acquisition quality affects average LTV
- LTV calculations should be updated as business metrics change
What Happens If You Ignore These?
- Overestimating LTV leads to overspending on acquisition
- Ignoring churn inflates lifetime value projections
- Not segmenting customers hides your most valuable cohorts
- Low LTV with high CAC creates an unsustainable business model
- Failing to invest in retention reduces actual LTV
Smart Tips
- Segment LTV by customer cohort for better accuracy
- Increase LTV by improving retention and reducing churn
- Compare LTV to CAC — aim for 3:1 ratio minimum
- Use LTV to determine maximum acceptable acquisition cost
- Invest in customer success to extend customer lifespan
Frequently Asked Questions
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