Customer Lifetime Value Calculator
Calculate customer lifetime value to inform acquisition spend, retention investment, and pricing decisions.
Customer Behavior
Business Metrics
Customer Lifetime Value
How to Use This Calculator
Enter average purchase value and frequency
Add customer lifespan and retention rate
Input gross margin percentage
Calculate CLV and CLV:CAC ratio
Frequently Asked Questions
How do I calculate customer lifetime value?
Basic formula: Average Purchase Value × Purchase Frequency × Customer Lifespan × Gross Margin. For subscription: Monthly Revenue × Gross Margin × Average Customer Lifespan in Months.
What's a good CLV:CAC ratio?
A 3:1 ratio is considered healthy—customers generate 3x what you spent to acquire them. Below 1:1 means you're losing money on acquisition. Above 5:1 may mean underinvestment in growth.
How do I increase CLV?
Focus on increasing purchase frequency (loyalty programs, subscriptions), raising average order value (upsells, bundles), improving retention, and expanding gross margins.
Should I segment CLV by customer type?
Absolutely. Different customer segments have vastly different CLVs. Calculate by acquisition source, product category, geography, or customer persona to optimize targeting.
How far out should CLV projections go?
Use historical retention data to project realistically. Many businesses use 3-5 year projections, but apply appropriate discount rates for future revenue uncertainty.
Why Use This Calculator
- Understand true customer value
- Set appropriate acquisition budgets
- Identify highest-value customer segments
- Justify retention investments
- Make data-driven pricing decisions
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"This calculator helped us justify our marketing budget to leadership with real data. Finally, a tool that speaks the CFO's language."
VP of Marketing, SaaS Company