Free customer lifetime value (cltv) calculator
Enter average order value, purchase frequency, gross margin, and customer lifetime — this customer lifetime value calculator returns CLTV and the LTV/CAC ratio, updated live, as you type.
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ROI = (gain − cost) ÷ cost × 100. This is simple ROI and does not account for time value of money.
Results are estimates. Consult a professional.
How the customer lifetime value calculator works
Customer lifetime value (CLTV or LTV) is the total gross profit a business expects to earn from a customer over the entire relationship. It answers the essential question: how much is a new customer actually worth? That number drives rational decisions on how much to spend acquiring them.
The simple model multiplies average order value, purchase frequency, gross margin, and customer lifetime. The discount model — preferred for subscription businesses — divides gross profit per period by the churn rate, capturing the compounding value of retention.
Worked example: e-commerce vs. SaaS comparison
An e-commerce brand has an average order value of $80, customers buy 3× per year, gross margin is 40%, and the average customer stays for 3 years. A SaaS tool charges $50/month MRR, 70% gross margin, and has a 15% annual churn rate.
CLTV by order value, purchase frequency, and margin
The table below uses the simple CLTV model with a 3-year customer lifetime. Values show how CLTV scales across common AOV, purchase frequency, and gross margin combinations — helping you see which levers have the biggest impact.
| AOV | Purchases/yr | 30% Margin CLTV | 50% Margin CLTV |
|---|---|---|---|
| $50 | 2× | $90 | $150 |
| $50 | 4× | $180 | $300 |
| $50 | 6× | $270 | $450 |
| $100 | 2× | $180 | $300 |
| $100 | 4× | $360 | $600 |
| $100 | 6× | $540 | $900 |
| $250 | 2× | $450 | $750 |
| $250 | 4× | $900 | $1,500 |
| $250 | 6× | $1,350 | $2,250 |
Source: Management accounting principles; assumes 3-year customer lifetime and no discounting
Tips for growing customer lifetime value
CLTV is the single most important number for setting a sustainable CAC ceiling. Businesses that know their CLTV can out-bid competitors for customers while remaining profitable — those that don't risk over-spending or leaving growth on the table.
- Focus on churn first — in the churn model, halving your churn rate doubles CLTV. No other single lever has the same leverage on customer value.
- Segment CLTV by cohort — customers acquired via referral, paid search, and organic often have dramatically different retention curves; average CLTV blends and hides this.
- Use CLTV to set channel-specific CAC targets — if your referral channel produces $900 CLTV and paid social produces $300 CLTV, they deserve very different CAC budgets.
- Increase purchase frequency through loyalty programs — moving a customer from 2× to 4× per year doubles CLTV without touching margin or customer lifetime.
- Protect margin on high-frequency customers — deep discounting to drive repeat purchases destroys the margin input that makes high-frequency CLTV valuable.
Accuracy and limitations
CLTV models are forecasts, not facts. The simple model assumes constant purchase frequency and margin over the customer lifetime — both of which typically change. The churn model assumes a steady-state churn rate, which is rarely true in the first 12 months of a customer relationship.
This calculator is for educational and planning purposes only. It does not constitute financial or investment advice. Not financial advice — CLTV projections can be materially wrong if churn rate, purchase frequency, or gross margin are estimated rather than measured from actual cohort data. Consult a financial advisor or analyst before using CLTV to justify capital allocation or fundraising projections.
Customer lifetime value terms defined
About this customer lifetime value calculator
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