Customer lifetime value (CLV) calculator

Start with gross profit (revenue minus direct COGS or delivery cost), not top-line revenue. Then pick the path that matches how customers pay you, and compare the result to CAC or CPA.

SaaS / subscription: Pull monthly ARPA or ARPU from billing, add gross margin %, and measure monthly logo churn from cohorts. Formula: LTV = (ARPA × margin) ÷ churn (churn as a decimal). Expected lifetime in months ≈ 1 ÷ churn.

Ecommerce / repeat purchase: Use average order value (AOV), purchases per year, average customer lifespan in years, and gross margin %. Formula: CLV = AOV × frequency × lifespan × margin.

Run the numbers in subscription or repeat purchase mode above — try the $800 SaaS or $240 ecommerce presets — then read the formula sections below for worked examples and optional LTV:CAC.

A good customer LTV is one that clearly exceeds what you pay to acquire and serve that customer — there is no universal dollar benchmark. Your gross margin, acquisition cost, and payback period matter more than a generic industry average.

For paid growth, many teams aim for LTV:CAC of 3:1 or higher in gross profit (roughly $3 of lifetime gross profit per $1 of CAC). Below 2:1 often points to weak retention or expensive acquisition; very high ratios can mean you are under-investing in growth — always check segments and payback.

Model SaaS LTV from churn in subscription mode; model retail CLV from order frequency and lifespan in repeat-purchase mode. For campaign spend, estimate CPA with our CPA calculator before comparing to CLV.

In marketing and SaaS, LTV usually means customer lifetime value. In lending, the same abbreviation means loan-to-value (loan amount ÷ collateral value). This calculator covers customer economics only — not mortgages, auto loans, or PMI removal.

Workforce attrition is a different topic again (staff turnover, not buyer profit). Use our attrition rate calculator for HR; use our churn rate calculator for customer retention %.

This is the usual back-of-envelope subscription model when churn is fairly stable and ARPA is flat — strong enough for planning and LTV:CAC checks before you invest in cohort-level models.

Worked example: ARPA $50/month, 80% gross margin, 5% monthly churn → LTV = (50 × 0.80) ÷ 0.05 = $800. Load the SMB SaaS (5% churn) preset to match.

ARPA (average revenue per account) and ARPU (average revenue per user) are monthly subscription revenue per customer before costs. When you have MRR and active customers, ARPA ≈ MRR ÷ customer count for that month.

Prefer logo churn (customers lost) over revenue churn when you care about customer-count economics, unless you explicitly model revenue retention. Always pair monthly churn with monthly ARPA — do not mix annual churn with monthly ARPA without converting.

If you only track annual churn, convert to a monthly rate or measure logo churn with our churn rate calculator, then enter the monthly figure here for dollar LTV.

Average order value (AOV) is revenue per order. Purchases per year is how often a typical customer buys in 12 months. Customer lifespan is how many years they stay active on average — not just their first year. Apply gross margin % so CLV reflects profit; the worked example below matches a common retail and DTC pattern ($100 AOV, four orders a year, three-year lifespan).

Worked example: $100 AOV, 4 orders/year, 3-year lifespan, 20% margin → CLV = 100 × 4 × 3 × 0.20 = $240 (annual value = $80). Use the Ecommerce ($240 CLV) preset.

Choose the side that matches how you bill. Both modes return margin-adjusted CLV/LTV — use gross margin % from finance or unit economics, not revenue alone. Need margin first? Try our profit margin calculator or COGS calculator.

LTV:CAC divides lifetime gross profit by customer acquisition cost. Many teams treat 3:1 or higher as a healthy planning band; below 2:1 often means acquisition or retention needs work before you scale spend. These thresholds match the optional verdict in the calculator above.

CAC payback is a separate check: compare CAC to monthly gross profit per customer (in subscription mode, monthly gross profit ≈ ARPA × margin %). Shorter payback frees cash for growth — but include refunds and sales-cycle length in your real model.

The optional panel uses one CAC figure, not a full marketing-and-sales build. For campaign CPA, use our CPA calculator, then compare to CLV.

In the simple SaaS formula, higher monthly churn lowers LTV because expected lifetime (months) ≈ 1 ÷ monthly churn rate. At 5% monthly churn, average lifetime is about 20 months; at 2% monthly, about 50 months — with ARPA and margin held constant.

Measure logo churn from cohorts with our churn rate calculator, then enter the monthly rate here for dollar LTV. Churn is the retention rate; CLV is the profit outcome in dollars.

If you usually build CLV in Excel or Google Sheets, you can get the same core formulas here without maintaining a template. Run SaaS or ecommerce customer lifetime value formulas live, then download CSV or PDF for decks or models — free, with no sign-up.

This version uses straightforward CLV/LTV formulas — not cohort curves or present-value discounting. Results are for planning and education, not audit or investment advice. Expand the items below for what is out of scope today.

You can raise CLV by moving any input in the formulas: retention, revenue per period, active lifespan, or margin. Change one field at a time in the calculator to see the dollar impact before you launch campaigns.

Pair results with our break-even calculator when you need fixed-cost coverage, not just per-customer value. For acquisition efficiency, compare CLV to ROAS or CPA using our ROAS calculator and CPA calculator.