LTV Calculator
Free customer lifetime value calculator. Enter average order value, purchase frequency and customer lifespan to get LTV instantly — the anchor metric for LTV:CAC and every profitable growth strategy.
What is customer lifetime value?
Customer lifetime value (LTV or CLV) is the total revenue a business expects from a single customer across the entire relationship. LTV is the ceiling for how much you can profitably spend to acquire that customer.
LTV formula
Simple: LTV = AOV × Purchase Frequency × Customer Lifespan.
Advanced (SaaS): LTV = (ARPA × Gross Margin %) ÷ Churn Rate. This version discounts future revenue by churn and margin, which matters for subscription businesses.
Why LTV matters
LTV justifies acquisition spend. Combined with CAC, it produces the LTV:CAC ratio — the single most important number for growth-stage boards.
LTV:CAC guidance
- < 1:1 — losing money on every customer.
- 1:1 – 3:1 — sub-scale; fix retention or acquisition cost.
- 3:1 — the healthy benchmark.
- > 5:1 — under-investing in growth.
How to increase LTV
- Raise average order value with bundles, upsells and premium tiers.
- Increase purchase frequency with lifecycle email and subscription models.
- Extend customer lifespan by reducing churn.
- Improve onboarding — the strongest lever for retention.
- Cross-sell adjacent products to existing customers.
LTV Calculator FAQ
What is customer lifetime value?
The total revenue a business expects from a single customer over the whole relationship.
What is the LTV formula?
Simple: LTV = AOV × Purchase Frequency × Customer Lifespan.
What is a good LTV:CAC?
3:1 is the healthy benchmark. Below 1:1 is losing money; above 5:1 is under-investing.
Should LTV use revenue or margin?
Use gross-margin LTV for true profitability, revenue LTV only for directional comparisons.
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Open →Last updated: Q1 2026