Customer Lifetime Value Calculator.

What is customer lifetime value?

Customer lifetime value (LTV, sometimes CLV) is the total revenue — or profit — a customer generates over the entire time they do business with you. It reframes marketing from "what did this sale cost?" to "what is this relationship worth?", which changes how much you can confidently spend to win a customer.

LTV = Average sale × Purchases per year × Customer lifespan (years)

Multiply by your profit margin to get lifetime profit — the number that actually matters when you compare it against what it costs to acquire a customer.

How to calculate LTV (worked example)

Say your average sale is $150, a customer buys 4 times a year, and stays for 5 years:

• Annual value = $150 × 4 = $600
• Lifetime value = $600 × 5 = $3,000
• At a 50% margin, lifetime profit = $1,500
• If it costs $300 to acquire that customer, your LTV:CAC ratio is 5:1 (profit basis)

Change any input in the calculator above and every number updates instantly.

What is a good LTV:CAC ratio?

A widely used benchmark is 3:1 — for every $1 you spend acquiring a customer, you earn about $3 in lifetime gross profit. Below roughly 1:1 you're losing money on each customer; much above 5:1 can mean you're under-investing in growth and leaving market share on the table. The calculator shows your ratio and the "target CAC" that keeps you at a healthy 3:1.

How to increase customer lifetime value

• Increase frequency — maintenance plans, reminders, and re-engagement bring customers back sooner
• Increase average sale — bundles, upgrades, and add-ons raise each transaction
• Increase lifespan — great follow-up, reviews, and reputation keep customers loyal for years
• Lower CAC — better targeting and conversion make each new customer cheaper to win