Customer Lifetime Value Calculator
Estimate revenue and gross-profit customer lifetime value and compare it with acquisition cost
Revenue lifetime value
How we calculated it
About the Customer Lifetime Value Calculator
Customer lifetime value estimates the economic value expected from a customer relationship over time. It helps connect acquisition cost, average order value, purchase frequency, margin and retention into one planning metric.
CLV is highly sensitive to assumptions. A simple model can be useful for direction, but it should not be mistaken for a precise forecast of how every customer will behave.
How to Use the Customer Lifetime Value Calculator
- Enter average order value or revenue per customer.
- Enter purchase frequency or recurring revenue period.
- Enter gross or contribution margin if the selected CLV model uses profit rather than revenue.
- Enter customer lifespan, retention or churn assumptions and calculate the expected value.
How the Calculation Works
A simple revenue-based CLV can be average order value × purchase frequency × average customer lifespan.
A margin-based model applies gross or contribution margin to the revenue value, while subscription models may use recurring margin divided by churn under simplifying assumptions.
Worked example
Customer Lifetime Value Calculator Worked Example
$60 AOV, 4 purchases per year, 3-year lifespan, 40% margin
Revenue CLV = $60×4×3 = $720. Margin-based CLV = $720×0.40 = $288 before acquisition and overhead costs.
Result guide
Understanding Your Customer Lifetime Value Calculator Result
A high CLV can support higher acquisition spending, but the useful comparison is usually CLV relative to CAC on the same margin and time basis.
Before you rely on the answer
Assumptions and Limitations
- Order value, frequency and lifespan assumptions are representative.
- Margin is defined consistently.
- Discounting, cohort changes and future behaviour are excluded unless the model explicitly includes them.
Practical tip
Using This Result in Practice
Build CLV from recent cohort data rather than a single all-time average when the business is changing quickly. Newer customers may behave differently from older cohorts.
Related calculations
Useful Calculations to Continue With
Compare the result with the Customer Acquisition Cost Calculator to assess whether acquisition spending is supported by customer economics.
If average order revenue is one of the uncertain inputs, verify it with the Average Order Value Calculator.
Common questions
Customer Lifetime Value Calculator FAQ
What is customer lifetime value?
It is an estimate of the revenue or margin expected from a customer over the relationship.
Should CLV use revenue or profit?
Both models exist, but margin-based CLV is usually more useful for acquisition economics.
Why can CLV be misleading?
Small changes in retention, churn, frequency or margin assumptions can create large changes in the estimate.