How this calculator works
LTV estimates the value a customer may generate over their relationship with your business. It is often used with CAC to judge whether acquisition spending is sustainable.
Revenue LTV = average order value × purchase frequency × customer lifespan
Gross-margin LTV = revenue LTV × gross margin
Gross-margin LTV = revenue LTV × gross margin
This is a simplified LTV model. Retention, churn, refunds, discounting, and cohort behavior can change the real value.
How to use this calculator
- Enter realistic values that match your current situation.
- Press Calculate to refresh the estimate.
- Compare the main result with the supporting details in the result panel.
- Change one input at a time to see which variable affects the result most.
Planning note: Customer Lifetime Value Calculator gives an educational estimate. It does not include every tax rule, fee, platform policy, market condition, or personal constraint, so use it as a quick planning reference rather than a final decision.
FAQ
What is customer lifetime value?
It is the estimated total value a customer produces over their lifetime with a business.
Why is LTV important?
It helps decide how much you can afford to spend to acquire a customer.
Should gross margin be included?
Yes, margin-adjusted LTV is usually more useful than revenue-only LTV.
How can LTV increase?
Increase order value, purchase frequency, retention, or gross margin.
Is LTV exact?
No. It is an estimate and should be updated with real customer data.