LTV calculator
Estimate what a customer is worth over the whole relationship: average order value \u00d7 purchases per year \u00d7 years. Add your margin for profit, and your CAC to see the LTV:CAC ratio.
Customer lifetime value (revenue)
$300.00
A simple estimate: real customers don't all stay the same time or buy the same amount. Use your own averages and recheck them as data comes in.
Why lifetime value matters
Lifetime value tells you how much you can afford to spend winning a customer. Next to your customer acquisition cost, it shows whether growth pays: if a customer is worth $300 in profit and costs $100 to win, every new one adds $200.
Three ways to raise it, and one way to need less of it
Lifetime value grows with order value, purchases per year and how long customers stay. Order value is often the quickest: see the levers in how to increase average order value, and measure yours with the AOV calculator.
The other side is the cost of winning the customer. A page that converts more of the same visitors lowers CAC, so the same lifetime value leaves more margin. Start with the free landing page analyzer or the conversion rate calculator.
Questions
How do you calculate customer lifetime value?
A simple version: average order value × purchases per year × years a customer stays. $50 × 3 a year × 2 years is $300. Multiply by your margin to get the profit a customer brings rather than the revenue.
Revenue or profit?
Use profit when you compare LTV with what you spend to win a customer: a customer who brings $300 of revenue at a 30% margin is worth $90 to you.
What is a good LTV:CAC ratio?
A common rule of thumb is around 3:1: a customer is worth three times what they cost to win. Below 1:1 you lose money on every customer; far above 3:1 you may be spending too little on growth.
What if I only sell once?
Then lifetime value is one order, and every customer has to pay back their acquisition cost on the first sale. That puts more weight on conversion and order value.
Do you store what I enter?
No. The calculator runs in your browser; nothing you type is sent anywhere.