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Customer Lifetime Value Calculator

Estimate what a customer is worth over a period you choose: the revenue they bring, and — with your margin — the contribution left after the costs of serving them. Add your acquisition cost to see the LTV:CAC ratio.

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What is a customer worth to me over time?

Your assumption of how long a customer keeps buying

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Result

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Enter your numbers

Fill in the fields and the result appears here.

The formula

Lifetime revenue = purchase value × purchases per year × yearsLifetime contribution = lifetime revenue × contribution marginLTV:CAC = lifetime contribution ÷ acquisition cost

Worked example

A customer spends $80 a time, 4 times a year. Over 3 years that is 80 × 4 × 3 = $960 of revenue. At a 60% contribution margin they leave $576. If winning them costs $120, LTV:CAC on contribution is 576 ÷ 120 = 4.8 : 1.

What the result means — and what it does not

  • It is an estimate built on your assumptions about purchase frequency and how long customers stay, not an established fact.
  • Contribution is not net profit; overhead still has to be paid from it.
  • Averages hide spread: a few loyal customers can carry many one-time buyers.

Common questions

Revenue or contribution — which lifetime value should I use?

Use contribution when deciding what you can spend to win customers, because it is what a customer actually leaves after the costs of serving them. Lifetime revenue is useful for forecasting sales but overstates what you can afford.

How do I choose the number of years?

Look at how long customers really stay. If you do not know yet, use a short horizon such as one year; it is better to underestimate than to spend against loyalty you have not seen.

What LTV:CAC ratio should I aim for?

There is no universal number. A ratio below 1 on contribution means acquisition costs more than customers return over the horizon. Above that, what is enough depends on your overhead, cash flow and how sure you are of the retention assumption.