Customer Lifetime Value Calculator

Find how much gross profit an average customer brings in over their lifetime, and compare it with what it costs to win them.

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Churn rate; retention is 100% minus this.
Optional: to value future profit in today’s dollars.
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Fractions and decimals both work.
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Lifetime Value
Gross profit per customer per year
Average customer lifetime
Lifetime revenue
LTV to CAC
Months to recover CAC
Verdict

Segments

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How to Calculate Customer Lifetime Value

Lifetime value is the gross profit a customer generates before they leave. With a steady yearly churn rate, the average customer lifetime is 1 ÷ churn.

Yearly gross profit = order value × orders per year × gross margin
LTV = yearly gross profit ÷ churn   With discounting: yearly profit × (1 + d) ÷ (d + churn)
LTV : CAC = lifetime value ÷ acquisition cost

Worked Example

Tips

A 3:1 LTV to CAC ratio is a common benchmark for a healthy business model; much higher can mean you are underinvesting in growth. Use gross margin, not revenue, or LTV will be overstated.