Home / Free Tools / Customer Lifetime Value Calculator
See what a customer is really worth over the life of the relationship, so you can plan what to invest in winning one.
Your Numbers
Leave blank for a revenue-based estimate. Enter a gross margin to estimate lifetime value based on gross profit before overhead.
Results
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Lifetime value (CLV)
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Annual value
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Lifetime revenue
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CAC target: enter a gross margin
Basis: revenue (no gross margin entered).
This is a planning estimate, not a spending limit. Consider overhead, cash flow, and customer retention.
Most businesses decide their marketing budget based on the first sale, and badly underspend as a result. Customer lifetime value (CLV) is the total profit you earn from a typical customer over the whole relationship. Once you know it, you can confidently invest more to acquire customers than competitors who only look at the first transaction, and win the market. This calculator turns a few simple inputs into your CLV and an illustrative acquisition-cost target to plan around, based on a 3:1 ratio of gross-profit lifetime value to acquisition cost.
Pair this with the marketing ROI calculator to see whether your current acquisition cost leaves room for profit.
The biggest lever on lifetime value is follow-up. Our CRM automation keeps customers coming back with the right message at the right time, automatically.
Common Questions
The simple formula is average order value × purchases per year × number of years a customer stays. To get profit-based CLV, multiply by your gross margin. For example, $150 × 4 purchases × 3 years = $1,800 in lifetime revenue. This calculator handles both the revenue and profit versions.
It shows what a customer is really worth, so you can plan acquisition spend around the whole relationship instead of the first sale. A customer who brings in $1,800 over time at a 40% gross margin is worth $720 in gross profit, so spending $200 to win them stays above a 3:1 ratio, even if the first sale barely breaks even. Treat it as a planning target, not a spending limit, and weigh overhead, cash flow, and retention. Businesses that budget on lifetime value can outbid competitors who only count the first purchase.
A common benchmark is a 3:1 ratio of gross-profit lifetime value to customer acquisition cost, meaning you earn at least three times what it costs to win a customer. Below 1:1 you are losing money on every customer; above 5:1 you may actually be underinvesting in growth.
Increase any of the three levers: order value (upsells and bundles), purchase frequency (reminders and re-engagement), or retention (great service and follow-up). Automated CRM follow-up is usually the highest-leverage move because it lifts frequency and retention at the same time with little ongoing effort.
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