Customer Lifetime Value (LTV) Calculator
Estimate how much a customer is worth over their whole relationship.
Leave blank to use revenue LTV.
Customer lifetime value
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Customer lifetime value (LTV or CLV) is the total revenue — or profit — you can expect from an average customer across their entire relationship with you. It's the number that tells you how much you can afford to spend acquiring customers. Enter your averages below, and optionally a gross margin to get a profit-based LTV.
How to calculate ltv
Formula
LTV = Average purchase value × Purchases per year × Lifespan (× Gross margin)
Multiply how much a customer spends per purchase by how often they buy in a year and by how many years they stay. That gives revenue-based LTV. Enter a gross margin percentage to convert it into profit-based LTV, which is the more useful figure for setting an acquisition budget. As a guideline, keep customer acquisition cost well below LTV — many teams aim for an LTV:CAC ratio of at least 3:1.
Example
A customer spends $60 per order, buys 4 times a year, and stays 3 years.
LTV = 60 × 4 × 3 = $720 in revenue over their lifetime.
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