LTV Calculator
Find out how much a customer is really worth. Enter order value, purchase frequency, lifespan and margin to get the lifetime value.
How it works
- 1
Enter average order value
What a customer spends per purchase, on average.
- 2
Add frequency and lifespan
Purchases per year and how many years a customer typically stays.
- 3
Add gross margin
The percentage of revenue kept as profit.
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Frequently asked questions
Around 3:1 or higher is a common target — spending too little may mean under-investing in growth, too little margin means each customer barely covers acquisition costs.
How lifetime value is calculated
LTV = average order value × purchases per year × customer lifespan × gross margin. A customer spending 60 per order, buying 4 times a year for 3 years at a 40% margin is worth 288 in lifetime profit.
LTV is the number that tells you how much you can afford to spend acquiring a customer (CAC). A healthy business usually keeps LTV at least 3 times its CAC.