Customer Lifetime Value Calculator
Calculate how much a customer is really worth to your business
Enter your profit margin to see LTV Profit, not just Revenue.
Why CLV is the “North Star” Metric
Customer Lifetime Value (CLV), sometimes called LTV, is the total amount of money a customer is expected to spend in your business during their lifetime. It is more important than a single sale because it tells you the long-term value of your relationships.
Businesses that focus on increasing CLV—rather than just acquiring cheap traffic—are more profitable and sustainable. This CLV Calculator helps you visualize that value instantly.
How to Calculate Customer Lifetime Value
The standard formula for calculating CLV involves three main variables. Here is the step-by-step breakdown:
× Purchase Frequency (Per Year)
× Customer Lifespan (Years)
Note: If you want to calculate the Net Profit CLV (what you actually keep), you must multiply the result above by your Profit Margin percentage.
How to Use This Calculator
Our tool requires three simple inputs:
- Average Order Value (AOV): How much does a customer spend on a typical transaction? (e.g., $50).
- Purchase Frequency: How many times per year do they buy? (e.g., 4 times).
- Customer Lifespan: How many years do they stick around before churning? (e.g., 3 years).
Optional: Enter your Profit Margin to see how much actual profit you pocket, rather than just top-line revenue.
3 Proven Ways to Increase CLV
1. Increase Average Order Value (AOV)
Use upsells and cross-sells at checkout. If a customer is buying a camera, offer a lens or a memory card immediately. Bundling products is another classic strategy to lift AOV.
2. Improve Purchase Frequency
Don’t let customers forget you. Use email marketing flows (like post-purchase sequences) to recommend complementary products 30 days after their first buy. Start a subscription program if possible.
3. Extend Customer Lifespan (Retention)
It costs 5x more to acquire a new customer than to keep an existing one. Invest in customer support and loyalty programs. A happy customer stays longer.
Frequently Asked Questions (FAQs)
What is the difference between CLV and LTV?
They are effectively the same thing. CLV stands for Customer Lifetime Value, and LTV stands for Life-Time Value. Marketers use the terms interchangeably.
What is a good CLV to CAC ratio?
The golden rule in marketing is 3:1. Your Customer Lifetime Value should be three times higher than your Customer Acquisition Cost (CAC). If your LTV is $300, you should aim to acquire a customer for $100 or less.
Why should I calculate Profit CLV instead of Revenue CLV?
Revenue feeds the ego; profit feeds the family. If you have high revenue CLV but very low margins, you might overspend on ads and actually lose money. Always look at the profit margin to be safe.