LTV Calculator
Enter an average order value, how often a customer buys per year, and how many years they typically stay a customer.
How it's calculated
LTV = Average order value × Purchases per year × Customer lifespan in years. This is the simplest common version of the formula; more advanced versions also factor in gross margin, since LTV based on revenue overstates value compared to LTV based on profit.
Worked example
Average order 60, 4 purchases a year, 3-year average lifespan: 60 × 4 × 3 = 720 lifetime value per customer.
Frequently asked
Should I use revenue or profit for average order value?
Either works, but be consistent with how you compare it to CAC. Using profit (after cost of goods) gives a more conservative, often more useful figure for deciding how much you can afford to spend acquiring a customer.
How do I estimate customer lifespan?
Divide 1 by your monthly or annual churn rate — a 25% annual churn rate implies an average 4-year lifespan. If you don't track churn yet, a rough estimate based on typical customer behavior is a reasonable starting point.