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Calculation Machine

Customer Lifetime Value Calculator

LTV from spend, frequency and churn.

Reviewed by James Whitfield · How we check our maths

Your values

ⓘ Live results

Results
Lifetime value
$498.67
Annual gross profit
$149.60
Average lifespan
3.3 years
Lifetime revenue
$906.67

Quick answer

Customer lifetime value is the total gross profit a customer generates before they churn.

The formula

LTV = AOV × orders/yr × margin ÷ churn

Worked example

Worked example

Using the values the calculator loads with.

Inputs

  • Average order value68 $
  • Orders per year4
  • Gross margin55 %
  • Annual churn rate30 %

Result

  • Lifetime value$498.67
  • Annual gross profit$149.60
  • Average lifespan3.3 years
  • Lifetime revenue$906.67

How to use the Customer Lifetime Value Calculator

  1. 1Enter your average order value and yearly order count.
  2. 2Enter gross margin percentage.
  3. 3Enter annual churn to set the customer lifespan.

Frequently asked questions

Should LTV use revenue or profit?

Use gross profit — revenue LTV overstates what a customer is worth.

What LTV:CAC ratio is healthy?

3:1 or better for most subscription businesses.

About this calculator