Marketing & Advertising
Customer Lifetime Value Calculator
Estimate customer lifetime revenue and gross profit from order value, purchase frequency, margin, and retention. Subtract acquisition cost, review the CLV-to-CAC ratio, compare retention scenarios, and export a professional PDF report.
Annual revenue per customer-
Lifetime revenue-
Gross-profit CLV-
CLV after acquisition cost-
CLV-to-CAC ratio-
Customer economics
Value across retention periods
Cumulative gross-profit CLVBefore acquisition cost
| Retention | Lifetime revenue | Gross-profit CLV | CAC | CLV after CAC | CLV:CAC |
|---|
Decision view
Customer value accumulation and CAC recovery
CAC recovery threshold$0
How to use Customer Lifetime Value Calculator
- Enter average order value, annual purchase frequency, gross margin, retention years, and acquisition cost for one customer segment.
- Confirm that order value and frequency use the same revenue definition and that margin reflects the modeled product mix.
- Read annual revenue, lifetime revenue, gross-profit CLV, CLV after CAC, and the CLV-to-CAC ratio separately.
- Run shorter retention and lower-margin cases because simple CLV is highly sensitive to both assumptions.
Calculator guide
Understanding Customer Lifetime Value Calculator
Customer lifetime value estimates the revenue and gross profit produced during an average customer relationship. Subtracting acquisition cost and comparing CLV with CAC turns the estimate into an acquisition-economics check.
Calculation method
How the calculation works
Gross-profit CLV = average order value x annual purchase frequency x gross margin x retention years. Multiply order value by annual purchase frequency and retention years for lifetime revenue. Apply gross margin for gross-profit CLV, then subtract CAC for contribution after acquisition.
Value construction
Build lifetime value one layer at a time
The model begins with purchase behavior, converts revenue to gross profit, and then subtracts acquisition cost.
Interpretation limit
Simple CLV is not a cohort survival model
The entered retention period is treated as an average duration. The calculation does not model churn timing, discount rates, reactivation, or changing purchase behavior.
Worked situations
Practical examples
- Use Customer Lifetime Value Calculator for a quick everyday estimate.
- Change any input to compare another scenario.
Better inputs
Useful tips
- Use observed cohort retention when available.
- Keep revenue, margin, and frequency definitions consistent.
- Compare multiple retention scenarios because CLV is highly sensitive to lifetime.
Before relying on the result
Limitations and common mistakes
- The simple model does not discount future cash flows.
- Order value, margin, and purchase frequency are assumed stable.
- Returns, service cost, churn timing, and reactivation may require a cohort model.
Reference
Key terms
- CLV
- Modeled value generated over a customer relationship.
- Retention
- Length of time a customer remains active.
- Purchase frequency
- Average number of purchases per year.
- CLV-to-CAC
- Gross-profit CLV divided by customer acquisition cost.
Important note
Calculated from the entered campaign values. Validate attribution, incrementality, lag, margin, and observed source data before making decisions.
Frequently asked questions
Should CLV use revenue or profit?
Gross-profit CLV is usually more informative because it reflects direct delivery cost.
What does CLV-to-CAC show?
It compares modeled lifetime gross profit with acquisition cost.
Does this model discount future value?
No. Use a discounted cohort model for long lifetimes or material capital costs.
Why test retention scenarios?
Small changes in assumed lifetime can materially change CLV.