Free tool
Customer Lifetime Value Calculator
How much is a customer really worth? Enter how much they spend, how often, and for how long to see both gross and profit-based lifetime value — plus a safe ceiling for acquisition cost.
Your numbers
Updates as you typeNothing is saved or sent anywhere.
Result
Enter your numbers
The lifetime value formula
Gross LTV = Avg purchase value × Purchases per year × Lifespan (years)Profit LTV = Gross LTV × Gross marginExample calculation
A customer spends $80 per purchase, buys 4 times a year for 3 years. Gross LTV is 80 × 4 × 3 = $960. At a 60% margin, profit-based LTV is $576, and a sensible max CAC is around $192.
What your result means
Profit-based LTV is the number that should guide spending. If you keep acquisition cost below the suggested max CAC, you grow profitably; spend above it and growth costs you money.
Common mistakes
- Using gross revenue instead of profit to judge how much you can spend.
- Over-estimating how long customers actually stay.
- Ignoring that improving retention raises LTV faster than chasing new buyers.
The number tells you where you are. Not what to do next.
A strong LTV is only valuable if you turn it into smarter acquisition and retention.
Cleverlio decides what your business should do this week and writes the work — the posts, the messages, the website copy. You review it and publish it yourself.
See what Cleverlio would doCommon questions
What is customer lifetime value (LTV)?
LTV is the total value a customer brings over the whole time they buy from you. Gross LTV is total revenue; profit-based LTV applies your margin so you see the actual profit a customer generates.
How is customer lifetime value calculated?
Multiply average purchase value by purchases per year by the number of years a customer stays. Multiply that by your gross margin to get profit-based LTV.
Should I use gross or profit-based LTV?
For deciding how much you can spend to acquire customers, use profit-based LTV. Gross LTV overstates what a customer is worth because it ignores the cost of delivering your product or service.
How does LTV help me set my acquisition budget?
A common rule keeps customer acquisition cost at around one third of profit-based LTV. That leaves room to cover overhead and still profit on each customer.
How do I increase customer lifetime value?
Increase average order value, encourage repeat purchases, improve retention so customers stay longer, and protect your margins. Small gains in retention often move LTV the most.