Customer Lifetime Value Calculator
Determine the total gross profit and revenue a typical customer contributes across their entire relationship with your company.
How to use the Customer Lifetime Value Calculator
- 1Enter Average Order Value (AOV).
- 2Enter purchase frequency per year.
- 3Enter average customer lifespan in years.
- 4Optionally specify gross profit margin percentage.
How LTV / CLV is Calculated
Multiply average purchase value by annual purchase frequency, customer lifespan in years, and gross margin percentage.
Lifespan is estimated in years, and margin converts top-line revenue into realized gross contribution.
- 1Annual Revenue per customer = $40 × 12 = $480
- 2Lifetime Revenue = $480 × 3 = $1,440
- 3Net CLV = $1,440 × 0.70 = $1,008.00
What affects LTV / CLV results
- Customer churn rate and retention incentives.
- Upselling, cross-selling, and repeat order rates.
Frequently Asked Questions
Why is CLV more important than single-order value?
CLV reveals how much you can profitably spend to acquire a customer. Businesses that know their CLV can outspend competitors on acquisition.
How does churn rate affect customer lifetime value?
Higher churn directly reduces customer lifespan (Lifespan = 1 / Churn). Cutting churn by half effectively doubles the average customer lifetime value.
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