Customer Lifetime Value (LTV) Calculator
Customer lifetime value is how much a customer is worth to the business across the whole relationship. Combined with CAC, it shows whether it pays to spend on acquiring them.
Your numbers
Result
- Total revenue over the period
- $3,600.00
| Item | Value |
|---|---|
| Average order value | $100.00 |
| Orders per year | 12 |
| Years retained | 3 |
| LTV (after margin) | $3,600.00 |
How to calculate LTV
The simple form is LTV = average order × orders per year × years retained. A customer who spends $100 an order, 12 times a year, for 3 years generates $3,600 in revenue. Apply your margin to turn that into the profit the customer actually contributes.
LTV and CAC together
LTV alone says little — what matters is the LTV/CAC ratio. If acquiring a customer costs $200 (CAC) and they generate $3,600 in LTV, the ratio is 18×, which is excellent. Aim for at least 3× for healthy, self-funding growth.
Frequently asked questions
Sources
- Business metrics — customer lifetime value
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