Customer Lifetime Value Calculator
Predict how much revenue a typical customer brings over their whole relationship with you. Enter average purchase value, purchase frequency, and customer lifespan to estimate CLV — with an optional LTV:CAC ratio.
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This is an ESTIMATE using the simple historical model. It ignores discounting (the time value of money) and assumes steady purchase behavior — use your own sales averages for the best result.
How to use this calculator
Enter your average purchase value, how many times a customer buys per year, and the average number of years a customer stays with you. Optionally add your customer acquisition cost to see the LTV:CAC ratio.
Example: a $60 average purchase × 6 purchases per year × 3 years = $1,080 in customer lifetime value, with $360 in annual revenue per customer.
How it works
CLV = average purchase value × purchases per year × customer lifespan in years. Implied annual revenue per customer = average purchase value × purchases per year. LTV:CAC ratio = CLV ÷ acquisition cost, when entered.
This is the simple historical CLV model: it multiplies historical averages and treats future revenue at face value. It ignores discounting — the fact that a dollar earned three years from now is worth less than a dollar today. More advanced models apply a discount rate to future revenue; for a quick planning number, the simple model is usually enough.
The ratio tells you how much headroom you have: an LTV:CAC of 3:1 or better is a common health benchmark. Use the ratio to cap acquisition spend — for a $1,080 CLV, spending around $360 per customer keeps you near 3:1.
Frequently asked questions
What is the customer lifetime value formula?
The simple historical model is: CLV = average purchase value × purchases per year × average customer lifespan in years. For example, $60 × 6 purchases per year × 3 years = $1,080.
Why does this calculator ignore discounting?
This uses the simple historical CLV model, which treats future revenue at face value. Discounted CLV models reduce future revenue by a discount rate to reflect the time value of money. For most small businesses the simple model is a good starting estimate.
How do I use CLV to set my marketing budget?
A common rule: your customer acquisition cost should stay well below your CLV — many businesses target an LTV:CAC ratio of at least 3:1. If your CLV is $1,080, that means spending up to roughly $360 to acquire a customer.
Is this an exact prediction of customer value?
No — it is an estimate. Real customer value varies by segment, churn behavior, and pricing changes over time. Use averages from your own sales data for the most meaningful result.