Customer Lifetime Value Calculator
Calculate customer lifetime value using average purchase value, purchase frequency, customer lifespan, and profit margin. This helps estimate the long-term value of each customer.
Enter the average amount a customer spends per purchase.
Enter how many times the average customer purchases each year.
Enter the average number of years a customer stays with your business.
Enter your estimated profit margin percentage if you want profit-based CLV.
How This Calculator Works
This calculator multiplies average purchase value by purchase frequency to estimate annual customer value. It then multiplies that annual value by customer lifespan to estimate total customer lifetime value. A profit-based CLV is also shown using your profit margin.
Formula
Customer Lifetime Value = Average Purchase Value * Purchase Frequency * Customer Lifespan
Example
If the average customer spends $150 per purchase, buys 6 times per year, and stays for 4 years, the customer lifetime value is $3,600. If your profit margin is 30%, the profit-based CLV is $1,080.
Frequently Asked Questions
What is customer lifetime value?
Customer lifetime value, or CLV, estimates the total revenue or profit a customer generates over the entire relationship with your business.
Why is CLV important?
CLV helps businesses understand how much a customer is worth, compare acquisition costs, and make smarter marketing and retention decisions.
What is a good CLV to CAC ratio?
Many businesses aim for a CLV to CAC ratio of at least 3 to 1, meaning customer lifetime value should be three times customer acquisition cost.
Should I use revenue or profit?
Revenue-based CLV is common, but profit-based CLV can provide a more accurate view of actual customer value.
Who uses CLV?
CLV is commonly used by marketers, ecommerce companies, subscription businesses, SaaS teams, and customer success teams.