E-commerce LTV Calculator
Estimate revenue and gross-profit customer lifetime value for your store from AOV, purchase frequency and lifespan — with optional refund and CAC inputs for LTV:CAC.
Written by the CalcBundle Research & Editorial Team · Reviewed by the Quality Review Team · Transparent formulas · results are estimates, not advice. · Updated
E-commerce customer LTV
Enter AOV, orders per year and customer lifespan (all greater than zero).
What is an e-commerce LTV calculator?
Customer lifetime value (LTV) estimates how much a customer is worth to your store over their whole relationship with you. It tells you how much you can afford to spend on acquisition and still grow profitably.
How to calculate e-commerce LTV
- Revenue LTV = AOV × purchase frequency × customer lifespan
- Gross-profit LTV = Revenue LTV × gross margin
- Or, using annual orders: Annual revenue per customer = AOV × annual orders, then × lifespan
Add a refund rate to see a refund-adjusted revenue LTV, and a CAC to see your LTV:CAC ratio.
Why repeat purchases matter
Most of a customer's value comes from repeat orders. Small improvements in retention or purchase frequency compound into large LTV gains — often the highest-leverage lever in e-commerce, ahead of raising AOV alone.
LTV and CAC only mean something together
A lifetime value figure on its own tells you very little; its whole purpose is to be weighed against what it costs to acquire a customer. If you earn $720 of gross profit from a customer who costs $180 to acquire, you have a healthy 4:1 relationship and room to invest in growth; if that same customer costs $600 to acquire, the business is barely viable. A widely cited rule of thumb is that gross-profit LTV should be at least three times CAC, with acquisition costs recovered within roughly a year. Compare the two directly with the LTV:CAC ratio calculator and the e-commerce CAC calculator; for a general, non-store version of the metric, see the LTV calculator.
Worked example
Take a $100 average order value, four purchases a year, sustained over three years. Revenue LTV is $100 × 4 × 3 = $1,200. At a 60% gross margin, gross-profit LTV is $720 — the figure that actually governs how much you can afford to spend on acquisition. Now improve retention so the average customer stays four years instead of three: revenue LTV climbs to $1,600 and gross-profit LTV to $960, a 33% gain from a single lever, with no change to order value or frequency. That is why retention so often outperforms every other growth tactic.
Frequently asked questions
What is customer lifetime value for e-commerce?
It is the total revenue — or gross profit — a customer generates over their relationship with your store. It is driven by average order value, how often they buy and how long they stay.
How do repeat purchases affect LTV?
Enormously. LTV scales with purchase frequency and lifespan, so improving retention and repeat-purchase rate usually lifts LTV far more than a one-off increase in order value.
What is the difference between LTV and AOV?
AOV is the value of a single order. LTV is the value of all orders a customer places over their lifetime. LTV = AOV × purchase frequency × lifespan.
What is LTV:CAC?
LTV:CAC compares lifetime value to acquisition cost. Enter your CAC and the calculator shows the ratio, a quick read on whether your unit economics work.
Should I use revenue LTV or gross-profit LTV?
Gross-profit LTV is the more honest figure for most decisions, because it reflects money you actually keep rather than money that passes through. Revenue LTV is easy to quote and useful for top-line planning, but a customer who generates $1,200 of revenue at a 20% margin is worth only $240 in gross profit — a very different number for judging how much you can spend to acquire them. When comparing LTV to acquisition cost, use the profit-based figure so the ratio is not flattered.
How does refund rate affect LTV?
Refunds reduce the revenue and profit a customer actually delivers, so a store with a high return rate has a lower effective LTV than its gross orders suggest. Entering a refund rate gives a refund-adjusted LTV that is closer to reality, which matters most in categories like apparel where returns are common. Ignoring refunds is a frequent reason LTV estimates come in too high.
How far into the future should LTV look?
Long enough to capture a typical customer relationship, but not so long that the estimate rests on guesswork. Many stores model a two- to three-year horizon, because predicting behaviour beyond that becomes speculative and heavy discounting of distant cash flows makes it matter less anyway. A shorter, well-grounded horizon you believe in is more useful than a large number built on optimistic assumptions about a distant future.
Related calculators
LTV
Estimate a customer's lifetime value from order value, frequency and lifespan — or churn.
E-commerce CAC
Calculate e-commerce customer acquisition cost, CAC % of AOV and LTV:CAC.
LTV:CAC Ratio
Compare lifetime value to acquisition cost and interpret the ratio.
AOV
Work out average order value and the revenue impact of raising it.
Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money. Customer lifetime value is an estimate based on the assumptions entered and depends heavily on retention.