LTV (Customer Lifetime Value) Calculator
Calculate Customer Lifetime Value (LTV) to measure the total earnings each customer brings to your business. Growth strategy and CLV analysis.
Average spend per transaction
How many times per year do they buy?
How many years does a customer stay?
Calculates margin-adjusted LTV
This tool is for informational purposes only and does not replace professional business or financial consulting.
LTV or CLV (Customer Lifetime Value) represents the total net revenue a customer will bring you throughout their relationship with your business. This metric is the cornerstone of growth marketing because it answers the question 'how much can I spend to acquire a customer?'
LTV Formula and Key Metrics
Basic LTV Formula
LTV = AOV × Purchase Frequency × Customer Lifespan
Three main data points are needed to calculate LTV: Average Order Value (AOV), Purchase Frequency, and Customer Lifespan.
LTV and CAC Balance (Unit Economics)
The LTV metric should not be evaluated alone but together with CAC (Customer Acquisition Cost). An LTV:CAC ratio of 3:1 or above indicates that your business is growing healthily. If the money you spend to acquire a customer (CAC) exceeds the total money you will earn from them (LTV), you need to reconsider your business model.
How to Increase LTV?
The most effective way to increase LTV is to raise customer loyalty (retention). Through subscription models, cross-sells, loyalty programs, and personalized email marketing, you can dramatically increase LTV by ensuring customers shop from you more frequently and for longer periods.
LTV and LTV:CAC Ratios by Industry
| Industry | Typical LTV | Typical CAC | LTV:CAC |
|---|---|---|---|
| SaaS (Enterprise) | $50,000+ | $10,000-20,000 | 3-5x |
| SaaS (SMB) | $2,000-10,000 | $300-1,500 | 3-5x |
| Finance & Insurance | $3,000-8,000 | $500-1,500 | 3-6x |
| E-commerce (Electronics) | $500-1,500 | $50-150 | 4-8x |
| E-commerce (Fashion) | $200-600 | $20-60 | 4-8x |
| Restaurant / Cafe | $1,000-2,500 | $10-30 | 40-100x |