Helpful Toolbox

Customer Lifetime Value (LTV) Calculator

Find out what a customer is really worth to your business — and whether what you spend to win them actually pays off.

📖 How it works & FAQ
$0Customer LTVmargin-adjusted lifetime value
$0Lifetime revenuebefore margin
$0Profit per yearper customer, margin-adjusted
—LTV : CACenter CAC to see ratio

What customer lifetime value tells you

Customer lifetime value (LTV) is the total profit you can expect from one customer over the entire time they buy from you. It reframes marketing spend as an investment: a $45 acquisition cost looks expensive next to a $60 first order, but looks cheap next to a customer who quietly generates $400 in margin over three years. Knowing your LTV is how you decide what you can afford to spend on ads, discounts, and retention.

The formula this calculator uses

LTV = average purchase value × purchases per year × customer lifespan in years × gross margin. Multiplying by gross margin matters — revenue-based LTV flatters your numbers, because it ignores what each sale costs you to fulfill. The margin-adjusted figure is the one you can actually reinvest. If you enter a customer acquisition cost (CAC), the calculator also shows your LTV:CAC ratio, the classic health check for whether growth spend pays for itself. All results update live as you type, and nothing leaves your browser. These figures are estimates only, not financial, tax, insurance, or legal advice.

How to use it

  1. Enter your average order or purchase value in dollars.
  2. Enter how many times a typical customer buys per year.
  3. Enter how many years a customer keeps buying (see the FAQ for a shortcut).
  4. Set your gross margin percentage — revenue minus cost of goods, divided by revenue.
  5. Optionally add your CAC to see the LTV:CAC ratio and a quick verdict.

FAQ

What is a good LTV:CAC ratio?
The common benchmark is 3:1 — three dollars of lifetime value for every dollar spent acquiring the customer. Below 1:1 you lose money on every new customer; above 5:1 you may be growing slower than you could.
How do I estimate customer lifespan?
Divide 1 by your annual churn rate. If 25% of customers stop buying each year, average lifespan is 1 ÷ 0.25 = 4 years. If you are new, start with 1–3 years and refine later.
Should I use revenue or margin for LTV?
Margin. This tool shows both, but the margin-adjusted number is what you can safely spend against. Comparing revenue LTV to CAC overstates how much acquisition you can afford.
Is my business data stored anywhere?
No. Everything is calculated in your browser with plain JavaScript — nothing is uploaded, tracked, or saved.