LTV Calculator
Calculate customer lifetime value and long-term profitability.
How to Use This LTV Calculator
Simple method: LTV = Average Purchase Value × Purchase Frequency × Customer Lifespan
With retention rate: Adjusts for customer churn over time using your annual retention rate.
Add profit margin to see actual profit per customer (revenue × margin %).
Why LTV Matters
LTV is arguably the most important metric in business. It tells you the total value a customer brings over their entire relationship with your company. This determines how much you can afford to spend on acquisition while remaining profitable.
The golden rule: LTV should be at least 3x your CAC (customer acquisition cost). If LTV is $300 and CAC is $100, you have healthy unit economics. If CAC exceeds LTV, your business is unsustainable.
LTV isn't static—it grows as you improve retention, increase purchase frequency, and upsell existing customers. A 10% improvement in retention can double LTV for subscription businesses.
Tips for Improving Your LTV
- Improve retention: Reduce churn through better onboarding, customer success, and product quality.
- Increase purchase frequency: Email campaigns, subscriptions, and loyalty programs drive repeat purchases.
- Upsell and cross-sell: Offer premium tiers, bundles, or complementary products to increase AOV.
- Focus on customer success: Happy customers buy more and stay longer. Invest in support and experience.
- Build loyalty programs: Reward repeat purchases to increase frequency and retention.
Want to learn more?
Read the full LTV glossary entry →