Customer Lifetime Value Calculator
Calculate how much each customer is worth to your business over their entire relationship.
CLV Formula
CLV = Avg Purchase × Frequency × Lifespan × Margin%
Key Benchmarks
- LTV:CAC ratio ≥ 3:1 = healthy
- Payback period < 12 months = ideal
- Increasing retention 5% can raise profits 25–95%
FAQs
CLV (or LTV) is the total revenue a business can expect from a single customer account over the entire relationship. It helps determine how much to spend on customer acquisition and retention.
A healthy LTV:CAC ratio is at least 3:1, meaning you earn $3 for every $1 spent acquiring a customer. A ratio below 1:1 means you're losing money on each customer acquired.