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Customer Lifetime Value Calculator
Estimate CLV from order value, frequency and customer lifespan.
Customer lifetime value
—
Per customer.
| Annual value | — |
|---|---|
| Order value | — |
| Purchases/yr | — |
| Lifespan | — |
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How the Customer Lifetime Value Calculator Works
Customer lifetime value (CLV or LTV) estimates the total revenue one customer brings over the whole relationship. The simplest form multiplies the average order value by how often they buy per year and by how many years they stay: $50 × 4 × 3 = $600. Knowing CLV tells you how much you can afford to spend acquiring a customer and still profit.
For a profit-based figure, multiply by your gross margin. CLV should comfortably exceed your customer acquisition cost — a healthy ratio is often cited as 3:1 or better.
CLV = average order value × purchases per year × lifespan (years)
Frequently Asked Questions
How do you calculate customer lifetime value?
Multiply the average order value by purchase frequency per year and by the customer’s lifespan in years.
Why does CLV matter?
It sets the ceiling on what you can spend to acquire a customer. A good business keeps CLV well above acquisition cost.
What is a good LTV to CAC ratio?
Around 3:1 or higher — each customer should return at least three times what they cost to acquire.
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