Customer Lifetime Value Calculator
Estimate the revenue and gross-profit value a customer generates over their lifetime — using order value, frequency and lifespan, or ARPU and churn for subscription businesses.
Written and reviewed by the CalcBundle editorial team. Transparent formulas · results are estimates, not advice.
Customer lifetime value
Enter average order value, purchase frequency and lifespan (all greater than zero).
What is an LTV calculator?
A customer lifetime value (LTV) calculator estimates how much a customer is worth to your business over the whole time they stay with you. Knowing LTV tells you how much you can afford to spend on acquisition and still grow profitably.
How to calculate LTV
- Simple LTV = Average order value × purchase frequency × customer lifespan
- Gross-profit LTV = LTV × gross margin
- Subscription LTV = ARPU ÷ monthly churn rate
This calculator supports the order-value method and the churn method, and shows both revenue and gross-profit LTV.
Revenue LTV vs profit LTV
Revenue LTV counts everything a customer pays. Gross-profit LTV applies your margin, so it reflects the money actually available to cover acquisition and overheads. For unit-economics decisions, gross-profit LTV is usually the better number.
Why retention matters
LTV is extremely sensitive to churn and lifespan. Reducing monthly churn from 5% to 3% lengthens the average customer lifespan substantially and can lift LTV by a large margin — often more than any acquisition optimisation.
Example
A customer with a $100 average order who buys 4 times a year for 3 years has a revenue LTV of $1,200. At a 60% gross margin, gross-profit LTV is $720.
Using LTV with CAC
LTV is most useful next to acquisition cost. Compare it with your CAC using the LTV:CAC ratio, and check how quickly you recover CAC with the CAC payback calculator.
Frequently asked questions
What is customer lifetime value (LTV)?
LTV is the total revenue — or gross profit — a customer generates over their entire relationship with your business. It helps you decide how much you can afford to spend acquiring customers.
How do you calculate LTV?
The simple formula is Average order value × purchase frequency × customer lifespan. For subscriptions, a common approach is ARPU ÷ monthly churn rate. Multiply by gross margin to get gross-profit LTV.
What is the difference between revenue LTV and gross-profit LTV?
Revenue LTV is the total revenue a customer brings. Gross-profit LTV multiplies that by your gross margin, so it reflects the actual profit available to cover acquisition and operating costs — usually the more meaningful figure for unit economics.
Why does retention matter so much for LTV?
LTV depends heavily on how long customers stay. Small improvements in retention (lower churn or longer lifespan) compound into large increases in LTV, which is why retention is often the highest-leverage growth lever.
Related calculators
CAC
Work out how much it costs to acquire one customer — blended, marketing and sales CAC.
LTV:CAC Ratio
Compare lifetime value to acquisition cost and interpret the ratio.
CAC Payback Period
See how long it takes to recover CAC from a customer's gross profit.
Business Valuation
Estimate your company's value with revenue, EBITDA and SDE multiples, adjusted for growth and risk.
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. Results are estimates based on the assumptions you provide. Actual lifetime value can vary and depends heavily on retention.