Estimate what an average customer is worth over their entire relationship.
Estimate what an average customer is worth over their entire relationship.
Enter values above and click Calculate — results will appear here with the formula explained.
Lifetime value aggregates everything an average customer contributes at gross margin across their whole tenure. It reframes acquisition decisions: paying $250 for someone worth $2,000 in margin is obviously rational — paying $250 for someone worth $180 is arson.
The simple multiplicative model here assumes steady purchasing and flat margins. Real cohorts churn unevenly and discounting erodes margin, so treat outputs as directional. The optional CAC input unlocks the classic LTV:CAC health ratio, where 3:1 or better is the conventional comfort zone.
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Lifetime value aggregates everything an average customer contributes at gross margin across their whole tenure. It reframes acquisition decisions: paying $250 for someone worth $2,000 in margin is obviously rational — paying $250 for someone worth $180 is arson. Formula: LTV = avg purchase × purchases/year × margin % × lifespan years
Customer Lifetime Value Calculator: Estimate what an average customer is worth over their entire relationship. Formula: LTV = avg purchase × purchases/year × margin % × lifespan years. Example: $80 orders × 12 purchases/year at 60% margin over 3 years: LTV = 80 × 12 × 0.
Estimate what an average customer is worth over their entire relationship. Formula: LTV = avg purchase × purchases/year × margin % × lifespan years
| Field | What to enter |
|---|---|
| Average purchase value ($) | e.g. 80 |
| Purchases per year | e.g. 12 |
| Gross margin (%) | e.g. 60 |
| Average customer lifespan (years) | e.g. 3 |
| Your CAC (optional) ($) | e.g. 250 |
All fields use the exact formulas shown below — results include step-by-step breakdowns you can verify by hand.
Lifetime value aggregates everything an average customer contributes at gross margin across their whole tenure. It reframes acquisition decisions: paying $250 for someone worth $2,000 in margin is obviously rational — paying $250 for someone worth $180 is arson.
The simple multiplicative model here assumes steady purchasing and flat margins. Real cohorts churn unevenly and discounting erodes margin, so treat outputs as directional. The optional CAC input unlocks the classic LTV:CAC health ratio, where 3:1 or better is the conventional comfort zone.
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$80 orders × 12 purchases/year at 60% margin over 3 years: LTV = 80 × 12 × 0.6 × 3 = $1,728. Against a $250 CAC that's a healthy 6.9:1.
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