LTV = AOV × purchases per year × gross margin × customer lifespan. An $80 AOV bought 3×/year at 60% margin for 3 years is worth $432. Enter your numbers below.
What is Customer LTV Calculator?
Customer lifetime value (LTV) is the total revenue you expect from a customer across their entire relationship with you. It's the number that tells you how much you can afford to spend to acquire one — the foundation of profitable growth.
How it works
A common LTV formula is average order value × purchase frequency × customer lifespan. A customer spending $50 per order, 4 times a year, for 3 years has an LTV of $600. Subtract cost of goods for a profit-based LTV.
How to use this tool
Enter your average order value, purchase frequency, and expected customer lifespan. The calculator returns LTV. Compare it to your customer acquisition cost — LTV should comfortably exceed CAC.
Why it matters
LTV changes everything about acquisition math. A business with $600 LTV can outspend one with $100 LTV on every channel and still profit. Knowing LTV lets you bid aggressively where competitors can't follow.
Frequently asked questions
What is a good LTV to CAC ratio?
A widely-cited healthy target is 3:1 — you earn three times what you spend to acquire a customer. Below 1:1 you're losing money on every customer; far above 3:1 you may be under-investing in growth.
How do I increase customer lifetime value?
Improve retention, increase purchase frequency with email and loyalty programs, raise average order value, and reduce churn. Retention is usually the biggest lever.
Should LTV use revenue or profit?
Profit-based LTV is more honest for budgeting, since it accounts for cost of goods. Revenue LTV is simpler but can overstate how much you can spend.