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Customer Lifetime Value Calculator

Estimate customer lifetime value (LTV) from average order value, purchase frequency, and customer lifespan.

Use the AOV Calculator if needed.
Leave blank to see a revenue-based estimate. Add a margin to convert it into a profit-based LTV — the figure that's actually comparable to CAC.

Formula & Assumptions

Revenue-Based LTV = Average Order Value × Purchases per Year × Customer Lifespan

Profit-Based LTV = Revenue-Based LTV × Contribution Margin

This is a simplified, widely-used approximation, not a precise forecasting model. It assumes order value, purchase frequency, and margin all stay constant over the customer's entire lifespan, and it ignores the time value of money (profit earned next year is treated the same as profit earned today). Real customer cohorts vary — some customers churn immediately, others stay for years — so treat this as a directional estimate, not a guarantee.

Worked Example

A customer places an average order of $50, orders 4 times a year, and stays a customer for 3 years. Revenue-based LTV = $50 × 4 × 3 = $600. At a 40% contribution margin, profit-based LTV = $600 × 0.40 = $240.

Compare the profit-based figure against CAC using the LTV:CAC Ratio Calculator.

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LTV:CAC Ratio Calculator

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