Customer Lifetime Value (CLV) Calculator

Work out how much a customer is really worth over their whole relationship with you, then check that number against what you spend to acquire one.

Free Marketing Tool

Customer Lifetime Value (CLV) Calculator

Work out how much a customer is really worth over their whole relationship with you, then check that number against what you spend to acquire one.

1
Enter purchase behaviour

Average order value and how often a customer buys in a year.

2
Add how long they stay

Customer lifespan in years, or a churn rate if that is easier to find.

3
Compare to acquisition cost

Add what it costs to win a customer and see your LTV to CAC ratio.

Purchase behaviour

Figures in

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What a customer spends on a typical single order or transaction with you.
How many times an average customer buys from you in a year. A once-a-year buyer is 1, a monthly subscriber is 12.

How long they stay

How long, on average, a customer keeps buying from you before they stop for good.
The share of customers who leave in a typical year. A 25% churn rate implies an average lifespan of four years.
%

Economics optional

The percentage of revenue you keep after cost of goods and delivery. Leave at 100 for a service business with no direct cost of sale.
%
What you spend, on average, to win one new customer across all your marketing and sales costs.
i

A high CLV means very little on its own. It only becomes a decision-making number once you compare it to what you spend to win that customer in the first place.

Customer lifetime value
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—Estimated lifespan
—Total orders over lifetime
—Gross profit CLV
LTV to CAC ratio—
Profit after acquisition cost—
Payback period—
Room to spend on acquisition—
Enter your average order value and purchase frequency on the left, then add a lifespan or churn rate, and your result appears here instantly.
Not sure if you're spending too much to win customers? Get a growth review

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Nothing saved yet. Run a calculation and press Save to keep it here, then tick any two to compare them side by side.

Currency for your entered figures defaults to USD and can be changed above with no conversion applied to what you type. Live conversion, when turned on, uses real exchange rates and is shown as an approximate reference, not a guaranteed rate. Rates by ExchangeRate-API, updated once daily. This model assumes steady average behaviour and does not account for discounting future revenue to present value.

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01Overview

What is customer lifetime value (CLV)?

Customer lifetime value, also called CLV, CLTV or LTV, is the total revenue or profit you can expect from one customer over the whole time they buy from you. It is the number that tells you how much you can afford to spend to win a customer.

The free CLV calculator above uses average order value, purchase frequency and customer lifespan (or churn rate, if that is easier to find). Add your acquisition cost and it returns the LTV to CAC ratio, the best single check on whether your growth is profitable.

Businesses that know their CLV can outbid competitors who only look at first-order profit, because they know what a customer is really worth.

Quick answer

CLV = average order value × purchases per year × customer lifespan in years. A customer spending $60, five times a year, for three years is worth $900. If lifespan is unknown, use 1 ÷ annual churn rate.

  • Free, no sign-up
  • Lifespan or churn input
  • LTV to CAC ratio
  • Any currency
02How to use

How to use the Customer Lifetime Value Calculator

Use averages from the last 12 months of sales data. Rough numbers still give a useful answer.

  1. Enter purchase behaviour

    Average order value and how often a typical customer buys in a year.

  2. Add how long they stay

    Average lifespan in years, or switch to churn rate if you track cancellations.

  3. Add acquisition cost

    What you spend in sales and marketing to win one new customer.

  4. Read the ratio

    An LTV to CAC ratio around 3:1 or higher is widely treated as healthy.

03How it works

How customer lifetime value is calculated

The simple model below works for most small and mid-sized businesses. Multiply by gross margin for a profit-based CLV.

The CLV equation
CLV=Avg order value × Orders per year × Lifespan (years)
$28 × 10 × 2.5 = $700
Where does your LTV:CAC ratio sit?
Example: 5:1
Below 1:11 to 2Around 3:1, healthy5:1+, under-investing?
01:12:14:16:1
CLV formulasCLV = AOV x Purchases per year x Lifespan (years)Lifespan = 1 / Annual churn rateLTV:CAC = CLV / Customer acquisition cost

Revenue CLV is easier to explain. Profit CLV, multiplied by gross margin, is safer for deciding how much to spend on acquisition.

Worked example

A coffee subscription business checks its unit economics.

Average order value
$28
Orders per year
10
Annual churn
40% (2.5 year lifespan)
CLV
$700
CAC
$140
LTV to CAC is 5:1. The business is under-investing and can afford to spend more on acquisition.
04Reference

How to read your LTV to CAC ratio

The ratio compares what a customer brings in with what it cost to win them.

LTV:CAC ratioWhat it usually meansTypical action
Below 1:1You lose money on every customerCut acquisition spend, fix pricing or retention
1:1 to 2:1Thin or no profit after other costsImprove retention and average order value
Around 3:1Widely treated as healthyScale steadily
5:1 or aboveVery efficient, possibly under-investingTest higher acquisition budgets

Also check payback period: how many months it takes to earn back CAC. Under 12 months is comfortable for most businesses.

05Tips

How to increase customer lifetime value

CLV has three levers: spend per order, how often people buy and how long they stay.

Do this

  • Raise order valueBundles, upsells and free-shipping thresholds lift average order value without new customers.
  • Prompt repeat purchasesReplenishment reminders and post-purchase email flows bring customers back on schedule.
  • Reduce churnFind out why customers leave. Onboarding, support speed and product quality matter more than discounts.
  • Reward loyaltySimple loyalty programmes and referral rewards give customers a reason to stay and bring friends.

CLV mistakes to avoid

  • Using revenue as profitSpending up to a revenue-based CLV can still lose money. Multiply by gross margin.
  • Averaging everyone togetherOne wholesale client can skew the average. Segment by channel or customer type.
  • Assuming infinite lifespanNew businesses should cap lifespan at what they can actually observe, often two or three years.
  • Ignoring time valueRevenue in year three is worth less than revenue today. Be conservative with long lifespans.
06FAQ

Frequently asked questions

How do you calculate customer lifetime value?

Multiply average order value by purchases per year and by average customer lifespan in years. For example, $50 x 4 x 3 = $600.

What is a good LTV to CAC ratio?

Around 3:1 is widely treated as healthy. Below 1:1 means you lose money on each customer. Well above 5:1 may mean you are under-spending on growth.

What if I do not know my customer lifespan?

Use churn. Lifespan equals 1 divided by annual churn rate, so 25% annual churn means an average lifespan of four years.

Is CLV the same as LTV?

Yes. CLV, CLTV and LTV all describe customer lifetime value. Some teams use LTV for revenue and CLV for profit, so check which one a report uses.

Should CLV use revenue or profit?

Use profit, meaning revenue times gross margin, when deciding how much to spend on acquisition. Revenue CLV overstates what you can afford.

How often should I recalculate CLV?

Quarterly is enough for most businesses, or after a pricing change, a new product line or a shift in retention.

The Big Growth team

Know your numbers, now grow them?

We build acquisition and retention campaigns around your real unit economics, so every dollar of spend has a clear payback. Explore our social media marketing services.