WibbyTools

LTV Calculator

Find out how much a customer is really worth. Enter order value, purchase frequency, lifespan and margin to get the lifetime value.

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How it works

  1. 1

    Enter average order value

    What a customer spends per purchase, on average.

  2. 2

    Add frequency and lifespan

    Purchases per year and how many years a customer typically stays.

  3. 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.