Calculate Customer Lifetime Value (LTV or CLV) — the total revenue and gross profit a typical customer generates over their relationship with your business.
How it works
- Input the average purchase value per customer transaction.
- Input the average purchase frequency per year.
- Enter the expected customer lifespan and gross margin to compute true Profit LTV.
Frequently asked questions
Should I use revenue or margin for LTV?
Margin-based LTV is more accurate for unit economics, since it reflects actual profit. Revenue-based LTV overstates the value a customer truly contributes.
How do I estimate customer lifespan?
Lifespan = 1 ÷ churn rate. If 25% of customers leave each year, the average lifespan is 4 years.
Why does LTV matter?
It sets the ceiling on what you can profitably spend to acquire a customer (CAC). LTV must comfortably exceed CAC for sustainable growth.