Business & Self-Employed · United States
Customer Lifetime Value Calculator
Updated on 22 Oct 2026 · Checked by Aotob
An average customer is worth $400 in gross profit.
They buy 4 times a year for about 3.3 years.
Customer lifetime value
$400gross profit
Gross profit a year$120
Average customer life3.3 years
Lifetime revenue$800
LTV : CAC5 : 1
Above 3 : 1 is healthy; you could afford to spend more to grow.
Show the working
CLV = 60.00 × 4 × 50% ÷ 30% = 400
Lifetime value by churn
| Yearly churn | Customer life | Lifetime value |
|---|---|---|
| 10% | 10 yrs | 1,200 |
| 20% | 5 yrs | 600 |
| 30% | 3.3 yrs | 400 |
| 40% | 2.5 yrs | 300 |
| 50% | 2 yrs | 240 |
Questions people ask
What is customer lifetime value?
The gross profit a customer brings in before they leave: order value × orders a year × margin ÷ yearly churn.
What is a good LTV to CAC ratio?
About 3 : 1. Much lower and growth loses money; much higher and you may be under-investing in marketing.
Why use profit, not revenue?
Revenue overstates what a customer is worth. You can only spend the margin on winning them.
Updated 22 Oct 2026Source: Standard business accounting formulasChecked by AotobAssumes steady order value and churn.Report an issue