A little help goes a long way. Find a tool/

Business

Customer Lifetime Value Calculator

Free customer lifetime value (CLV) calculator: estimate lifetime profit from average order value, purchase frequency, gross margin and customer lifespan, then compare CLV against your customer acquisition cost.

YOUR WORKSPACEFree to use. No sign-up.
—
Enter your customer economics above, then press Calculate.

Deep dive guides

A LITTLE CONTEXT · 4 MIN READCustomer Lifetime Value: The Four-Input Approximation

How customer lifetime value calculator works

Customer lifetime value (CLV) estimates the total profit one customer relationship will produce. The workhorse approximation multiplies four inputs: average order value (what a typical order is worth), purchase frequency (orders per year), gross margin (the share of revenue that is actually profit), and customer lifespan (how many years the relationship lasts). The product is the lifetime profit contribution of an average customer.

Margin matters more than it first appears. Lifetime revenue — order value × frequency × lifespan — is the number vanity dashboards show, but you cannot pay salaries with revenue: a customer who spends $1,440 over three years at a 55% margin is worth $792, not $1,440. The calculator shows both figures so the gap between revenue CLV and profit CLV stays visible.

If you enter your customer acquisition cost (CAC), the tool adds the read that makes CLV actionable: the CLV:CAC ratio. The common heuristic is 3:1 or better — customers return at least three times what they cost to acquire. Below 1:1 you lose money on every new customer; between 1:1 and 3:1 you are funding growth on thin margins; at 3:1 and above, acquisition spending scales comfortably.

Frequently asked questions

What is a good CLV:CAC ratio?
The common benchmark is 3:1 — a customer should return about three times what they cost to acquire. Below 1:1 you lose money on every acquisition; 1:1 to 3:1 is marginal, leaving little room for churn, refunds or rising ad costs; 3:1 and above is healthy. Far above 5:1 can even mean you are underinvesting in growth.
Is this CLV formula revenue or profit?
This calculator computes profit-based CLV: revenue is multiplied by your gross margin before it accumulates over the lifespan. Revenue-based CLV (also shown) is useful for comparing customer segments, but profit-based CLV is the number that answers 'how much can I spend to acquire a customer?'
How do I estimate customer lifespan?
A practical shortcut is the reciprocal of your churn rate: if you lose 4% of customers per month, the average customer stays about 1 ÷ 0.04 = 25 months, or roughly two years. Cohort analysis — tracking how long each signup month keeps buying — is more accurate, but the churn shortcut gets you into the right range.
Should CLV be discounted to present value?
Strictly, yes — profit received in year 3 is worth less than profit today. For short lifespans (2–4 years) and modest discount rates, the undiscounted figure overstates CLV by roughly 10–25%. This calculator keeps the undiscounted approximation, which is the standard version of the four-input formula; treat very long lifespans with extra skepticism.
What is the difference between CLV and LTV?
None — the terms are interchangeable. 'Lifetime value' (LTV) is the older shorthand and 'customer lifetime value' (CLV) the more explicit one. Both describe the same quantity: the total value a customer contributes over the whole relationship. Watch instead for the revenue-versus-profit distinction, where the real ambiguity lives.