About the Customer Lifetime Value Calculator
Customer lifetime value estimates the total profit a customer brings over the whole relationship. Combine average purchase value, how often they buy, how long they stay, and your margin to see what each customer is really worth.
How it’s calculated
LTV = average order value × purchases per year × years retained × gross margin%.
Example calculation
A $60 order, 4 times a year, for 5 years at a 60% margin is worth about $864 per customer.
Frequently asked questions
Why include gross margin?
Revenue isn't profit. Multiplying by margin turns lifetime revenue into the lifetime profit a customer actually generates, which is what you can spend to acquire and serve them.
How does LTV relate to CAC?
LTV should comfortably exceed customer acquisition cost — a common target is at least 3× — otherwise growth costs more than it returns.
This tool provides estimates for general informational and educational purposes only. Results are based on the values you enter and standard formulas, and may not reflect your specific circumstances.