Customer Lifetime Value Calculator
Estimate the total value a typical customer brings over their relationship with you.
How to use the Customer Lifetime Value Calculator
- Enter the average value of a single order.
- Enter how many times a customer buys per year.
- Enter how many years a customer stays, on average.
- Set your gross margin to see profit, or 100% for revenue.
CLV = Average order × purchases per year × lifespan × gross margin
About the Customer Lifetime Value Calculator
Customer lifetime value answers a question that shapes almost every growth decision: how much is a customer actually worth to you over the whole time they buy from you? This calculator multiplies the average order value by how often they buy, by how many years they stay, and then by your gross margin to turn that revenue into profit. The result is the ceiling on what you can sensibly spend to win and keep a customer.
Setting CLV against acquisition cost is where it earns its keep. If a customer is worth $540 in lifetime profit and costs $50 to acquire, the economics are strong; if they cost $300, the model is fragile. Because lifespan and repeat purchase drive the number as much as order size, CLV also makes the case for retention — keeping customers longer often lifts value more cheaply than chasing new ones.
Use the gross margin field to switch between a revenue view (100%) and a profit view (your actual margin); profit is the more honest basis for spending decisions. This is a steady-state estimate and does not discount future value or model churn precisely. Pair it with the customer acquisition cost calculator to check the CLV-to-CAC ratio.
Frequently asked questions
Should I use margin or revenue?
For spending decisions, use your gross margin so the figure reflects profit, not just sales. Set margin to 100% only if you specifically want the lifetime revenue a customer generates.
What is a healthy CLV to CAC ratio?
A common benchmark is at least 3 to 1 — a customer worth three times what it costs to acquire them. Below that, there is little room to cover the cost of serving them and still profit.
How do I estimate customer lifespan?
Look at how long customers typically keep buying before they stop. If you know your annual churn rate, average lifespan is roughly one divided by the churn rate — a 25% churn implies about four years.