Customer Lifetime Value Calculator

What Is Customer Lifetime Value?

Customer Lifetime Value (CLV or LTV) estimates the total revenue — or, when you factor in margin, the total profit — a business can expect from a single customer over the entire time they keep buying. It reframes a customer from a one-time transaction into an ongoing relationship, which matters most when you're deciding how much you can afford to spend acquiring a new one.

A business with a $50 average order but customers who stick around for five years and buy monthly is worth far more per customer than the order value alone suggests — CLV is what makes that difference visible and comparable across different products, pricing, or retention strategies.

How to Use This Calculator

Enter your average order value, how many times a typical customer purchases per year, and how many years they stay a customer on average. If you want CLV expressed as profit rather than revenue, enter your gross margin percentage — leave it at 100% to see raw revenue instead.

How We Calculate It

We multiply average order value by purchase frequency to get annual revenue per customer, then multiply that by your average customer lifespan to get total lifetime revenue. Finally, we apply your gross margin percentage to convert that revenue figure into an estimate of lifetime profit — the number most useful for setting a ceiling on acceptable customer acquisition cost.

A Few Notes

This is the simple, widely used version of CLV — it treats purchase frequency and lifespan as flat averages rather than modeling how retention actually decays over time (a more advanced, cohort-based CLV model does that, but requires historical retention data this calculator doesn't ask for). Treat the result as a useful planning benchmark, and revisit it periodically as your actual retention and order data change.