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Open toolCustomer Lifetime Value Calculator
Enter your average order value (AOV), annual purchase frequency, gross margin percentage, average customer lifespan, and CAC in the Customer Lifetime Value Calculator below to compute gross-margin CLV, LTV:CAC ratio, net lifetime profit, and payback period.
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Enter the inputs, then select Calculate CLV.
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How Customer Lifetime Value Calculator works
The Customer Lifetime Value Calculator multiplies AOV by annual order frequency to establish annual revenue per customer, scales across your retention lifespan, applies your gross margin percentage to isolate contribution profit, and benchmarks the result against your Customer Acquisition Cost (CAC).
Gross-Margin CLV = AOV * Frequency * (Margin% / 100) * Lifespan; Payback Months = (CAC / Annual Gross Profit) * 12.
Includes a +-20% retention sensitivity range in the export report so you can evaluate downside and upside churn scenarios.
Customer Lifetime Value Calculator Quick Reference & Input Guide
Review the input parameters, allowed value ranges, and worked reference cases for the Customer Lifetime Value Calculator below before running your calculation.
| Parameter / Scenario | Default / Sample Value | Rule or Allowed Range | Output / Usage Note |
|---|---|---|---|
| Input: Average order or transaction value (AOV) | 120 | Range: 0.01 to 10000000 | Required workspace parameter |
| Input: Purchase frequency per year | 4 | Range: 0.1 to 365 | Required workspace parameter |
| Input: Gross profit margin | 65 | Range: 1 to 100 | Required workspace parameter |
| Input: Average customer lifespan | 3.5 | Range: 0.1 to 50 | Required workspace parameter |
| Worked Case 1: Direct-to-consumer brand ($120 AOV, 4 orders/yr, 65% margin, 3.5 yr lifespan, $180 CAC) | Preloaded / test values | Annual Customer Value = AOV * Frequency; Gross Lifetime Revenue = Annual Value * Lifespan; Gross-Margin CLV = Gross Lifetime Revenue * (Margin% / 100); LTV:CAC = CLV / CAC | Annual customer revenue is $480.00 ($312.00 annual gross profit). Across 3.5 years, gross lifetime revenue is $1,680.00 and Gross-Margin CLV is $1,092.00. Against $180.00 CAC, LTV:CAC is 6.07x, net profit after CAC is $912.00, and CAC payback takes 6.92 months. |
| Worked Case 2: Monthly SaaS plan ($49/mo ARPA, 12 billings/yr, 80% margin, 2.5 yr lifespan, $350 CAC) | Preloaded / test values | Annual Customer Value = AOV * Frequency; Gross Lifetime Revenue = Annual Value * Lifespan; Gross-Margin CLV = Gross Lifetime Revenue * (Margin% / 100); LTV:CAC = CLV / CAC | Annual revenue is $588.00 ($470.40 annual gross profit). Over 2.5 years, Gross-Margin CLV is $1,176.00 with a 3.36x LTV:CAC ratio and an 8.93-month payback period. |
How to use Customer Lifetime Value Calculator step by step
Pull your trailing 12-month AOV, repeat order rate, gross margin after COGS, and blended CAC from your store or billing analytics.
Enter AOV and annual purchase frequency
Input your average order value in dollars and the average number of purchases a customer makes per year.
Set gross profit margin % and customer lifespan
Enter your gross margin percentage after product and fulfillment costs, and set the average customer lifespan in years.
Enter CAC to compute LTV:CAC and payback months
Input your Customer Acquisition Cost (CAC) and click Calculate CLV to view net lifetime profit, LTV:CAC multiple, and payback months.
Worked examples for Customer Lifetime Value Calculator
Compare a repeat e-commerce brand against a monthly B2B SaaS plan.
Direct-to-consumer brand ($120 AOV, 4 orders/yr, 65% margin, 3.5 yr lifespan, $180 CAC)
Annual customer revenue is $480.00 ($312.00 annual gross profit). Across 3.5 years, gross lifetime revenue is $1,680.00 and Gross-Margin CLV is $1,092.00. Against $180.00 CAC, LTV:CAC is 6.07x, net profit after CAC is $912.00, and CAC payback takes 6.92 months.
Monthly SaaS plan ($49/mo ARPA, 12 billings/yr, 80% margin, 2.5 yr lifespan, $350 CAC)
Annual revenue is $588.00 ($470.40 annual gross profit). Over 2.5 years, Gross-Margin CLV is $1,176.00 with a 3.36x LTV:CAC ratio and an 8.93-month payback period.
Deduct payment processing and shipping from gross margin
If product cost is 25% of revenue and shipping + Stripe fees take another 10%, enter 65% (not 75%) as your Gross profit margin.
How to interpret the Customer Lifetime Value Calculator output
Focus on Gross-Margin CLV (not top-line lifetime revenue) when setting ad spend ceilings.
The headline result shows Gross-Margin CLV and LTV:CAC ratio. Breakdown cards display Gross Lifetime Revenue, Annual Gross Profit per customer, Net Lifetime Profit after subtracting CAC, CAC Payback Period in months, and Implied Annual Churn Rate (1 / Lifespan).
Input limits, assumptions, and related tools
Note that simple cohort CLV does not apply a cash-flow discount rate (WACC).
This model computes undiscounted simple CLV assuming steady annual purchase frequency and margin across the customer lifespan. For multi-year enterprise contracts above 5 years, discounting future cash flows by 8-12% annually will lower present-value CLV.
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Open toolCustomer Lifetime Value Calculator: common questions
Answers about using Customer Lifetime Value Calculator and understanding its results.
Should Customer Lifetime Value (CLV) be calculated using gross revenue or gross margin?
Always use gross margin (Revenue minus Cost of Goods Sold) when comparing CLV against Customer Acquisition Cost (CAC). Using top-line revenue without deducting product and fulfillment costs overstates how much cash a customer actually contributes to pay back marketing spend.
How do I estimate average customer lifespan from my churn rate?
In a constant-churn cohort model, Average Lifespan = 1 / Churn Rate. For example, if 25% of your customers churn each year, average lifespan is 1 / 0.25 = 4.0 years. If monthly churn is 4%, average lifespan is 1 / 0.04 = 25 months (2.08 years).
What is a healthy LTV:CAC ratio and CAC payback period?
Subscription and e-commerce unit economics typically target a gross-margin LTV:CAC ratio of 3.0x or higher and a CAC payback period under 12 months, though capital-efficient businesses aim for 6 to 9 months.
How do I enter a monthly SaaS subscription into this calculator?
Enter your monthly ARPA (Average Revenue Per Account) as the Average order value, set Purchase frequency per year to 12, enter your SaaS gross margin (typically 75% to 85%), and enter average retention in years.
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