Customer Lifetime Value Calculator
Calculate customer lifetime value (CLV/LTV) using purchase frequency, average order value, and customer lifespan. Includes profit CLV, discounted NPV, CLV:CAC ratio, and payback period.
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Customer Lifetime Value
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Annual Customer Value —
Monthly Customer Value —
Extended More scenarios, charts & detailed breakdown ▾
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yrs
Customer Lifetime Value
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Annual Value —
Monthly Value —
Professional Full parameters & maximum detail ▾
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Simple CLV
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Profit CLV —
Predicted Lifespan —
CLV:CAC Ratio —
CAC Payback Period —
Annual Value with Expansion —
How to Use This Calculator
- Enter average purchase value (revenue per transaction).
- Enter purchase frequency (how many times a year a customer buys).
- Enter customer lifespan in years (or use the retention rate in Professional mode to calculate it automatically).
- See CLV, annual value, and monthly value instantly.
- Use With Margins tab to get profit-based CLV.
- Use Discounted CLV tab for NPV-based calculation with discount rate.
Formula
CLV = Avg Purchase Value × Purchase Frequency × Customer Lifespan
Profit CLV = CLV × Gross Margin %
Customer Lifespan = 1 ÷ Annual Churn Rate
CLV:CAC Ratio = Profit CLV ÷ Customer Acquisition Cost
Example
$100 avg order, 4× per year, 5 years: CLV = $100×4×5 = $2,000. With 40% margin: Profit CLV = $800. CAC = $200: CLV:CAC = $800÷$200 = 4:1. Monthly profit = $400÷12 = $33.33. CAC payback = $200÷$33.33 = 6 months.
Frequently Asked Questions
- A CLV:CAC ratio of 3:1 is the standard benchmark for healthy SaaS businesses — meaning you earn $3 in lifetime profit for every $1 spent acquiring a customer. Below 1:1 means you're losing money on every customer. Above 5:1 may indicate underinvestment in growth.
- Simple CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan. For profit-based CLV, multiply by gross margin. For discounted CLV, apply NPV calculation using your cost of capital (WACC) as the discount rate.
- CLV (Customer Lifetime Value) and LTV (Lifetime Value) are used interchangeably in most business contexts. Some distinguish CLV as forward-looking (predicted) and LTV as historical (realized). This calculator uses the predictive approach.
- Customer Lifespan = 1 ÷ Churn Rate. At 80% annual retention (20% churn), lifespan = 5 years. At 90% retention (10% churn), lifespan = 10 years. Improving retention from 80% to 90% doubles customer lifetime and roughly doubles CLV.
- SaaS companies target CAC payback under 12 months. E-commerce businesses often target 3–6 months. The payback period should always be shorter than the average customer lifespan — otherwise each customer relationship is unprofitable.