Customer Lifetime Value Calculator
Estimate how much revenue and profit a typical customer is worth over the whole relationship.
This calculator runs entirely in your browser. Nothing you enter is uploaded or stored.
How to use this tool
This customer lifetime value calculator (CLV) shows how much a single customer is worth across the full relationship, not just on their first sale. It is one of the core LTV business metrics every marketer, founder, and growth team relies on to decide how much they can spend to win a customer. Enter your numbers and press Calculate.
- Average order value: the typical dollar amount a customer spends in one purchase. Add up recent revenue and divide by the number of orders if you are not sure.
- Purchases per year: how many times a customer buys from you in a year. This is the transaction frequency value that turns a single sale into a yearly relationship.
- Customer retention (years): the average length of time a customer keeps buying before they leave. A two-year average lifespan would be entered as 2.
- Gross margin % (optional): the share of revenue left after the direct cost of the product or service. Leave it blank to see revenue only, or fill it in to see profit-based CLV.
The tool returns the yearly value of a customer, the total number of purchases over their lifetime, the gross lifetime revenue, and the margin-adjusted lifetime profit. You can copy or download the full breakdown.
The formula and how it works
At its simplest, customer lifetime value chains three numbers together: how much a customer spends per order, how often they order, and how long they stay. Adding a gross margin turns that revenue figure into a profit figure, which is the number most teams budget against.
Gross CLV = annual customer value x retention years
Margin-adjusted CLV = gross CLV x (gross margin % / 100)
The gross CLV tells you the total revenue a customer drives over their lifetime. The margin-adjusted CLV tells you the actual profit that revenue produces, which is what you can compare against your customer acquisition cost. A common rule of thumb is that lifetime value should be at least three times the cost to acquire a customer.
A real example
Suppose an online coffee shop has an average order value of 60 dollars, customers buy 4 times a year, and the average customer stays for 3 years. The annual customer value is 60 times 4, which is 240 dollars. Over 3 years that is 240 times 3, or 720 dollars in gross lifetime revenue from 12 total purchases. If the gross margin is 40 percent, the margin-adjusted CLV is 720 times 0.40, which is 288 dollars of profit per customer. So the shop could spend up to roughly 96 dollars to acquire a customer and still hit a healthy three-to-one return.
Common questions
What is customer lifetime value?
Customer lifetime value, often shortened to CLV or LTV, is the total amount of revenue or profit a business expects to earn from one customer across the entire relationship. It is a key metric for setting marketing budgets, because it tells you how much you can afford to spend to win and keep a customer.
What is the difference between CLV and LTV?
They mean the same thing. CLV stands for customer lifetime value and LTV stands for lifetime value, and the terms are used interchangeably across LTV business metrics. Both describe the long-term value of a customer rather than the value of a single sale.
Should I use revenue or profit for CLV?
It depends on the decision. Gross CLV uses revenue and is fine for comparing customer segments. For budgeting acquisition spend, the margin-adjusted CLV is more accurate because it reflects the actual profit each customer brings. Enter your gross margin percent to see both numbers side by side.
How do I find my purchase frequency and retention?
Purchase frequency is the average number of orders a customer places in a year, found by dividing total orders by your active customer count. Retention in years is your average customer lifespan, which is roughly one divided by your annual churn rate. A 33 percent yearly churn means customers stay about 3 years on average.
Why does customer value matter for marketing?
Knowing a customer's value sets the ceiling on what you can spend to acquire one and still be profitable. If a customer is worth 288 dollars in lifetime profit, paying 50 dollars to win them is a strong deal, while paying 300 dollars would lose money. It turns guesswork into a clear, comparable number.
This calculator provides educational estimates only and is not professional financial or marketing advice. Real customer behavior, discount rates, and costs vary over time and are not fully captured by this simple model. Use the results as a guide, not a guarantee.