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CLTV Calculator

Calculate customer lifetime value from your metrics

Average revenue per user each month
Percentage of revenue after direct costs
Percentage of customers lost each month
Understanding

What is CLTV (Customer Lifetime Value)?

Customer Lifetime Value estimates the total revenue a business can expect from a single customer over the entire duration of their relationship. It is essential for understanding how much you can afford to spend on customer acquisition while remaining profitable.

Key Terms
CLTV/LTV

Customer Lifetime Value, the total expected revenue from one customer over their entire relationship with your business.

ARPU

Average Revenue Per User, the mean monthly or annual revenue generated per customer across all pricing tiers.

Gross Margin

The percentage of revenue remaining after subtracting the direct costs of delivering your product, indicating production efficiency.

Customer Lifespan

The average duration a customer remains subscribed before churning, typically calculated as the inverse of the churn rate.

Formulas Used
CLTV
CLTV = ARPU × Gross Margin % × Average Customer Lifespan

Multiply average revenue by margin and lifespan to determine how much gross profit a typical customer generates over their lifetime.

Average Lifespan
Lifespan = 1 ÷ Monthly Churn Rate

Invert the monthly churn rate to estimate how many months the average customer stays before cancelling.

How it works

Three steps.No guesswork.

01

Enter your metrics

Input your average revenue per account, gross margin percentage, and monthly or annual churn rate.

02

Calculate lifetime value

The calculator computes your CLTV using standard formulas and shows the expected customer lifespan.

03

Review profitability

See your CLTV alongside key ratios like CLTV-to-CAC to assess long-term unit economics.

Use cases

Built for founderswho move fast.

Marketing budget planning

Determine how much you can afford to spend acquiring a customer based on their lifetime value.

Investor pitches

Demonstrate strong unit economics by showing a healthy CLTV-to-CAC ratio.

Pricing optimization

Model how pricing changes impact customer lifetime value and overall profitability.

Deep dive

Understanding Customer Lifetime Value

Customer Lifetime Value (CLTV or LTV) represents the total revenue a business can expect from a single customer over the duration of their relationship. It is one of the most important metrics for subscription and recurring-revenue businesses.

The simplest CLTV formula is: CLTV = ARPA x Gross Margin / Churn Rate. This gives you the gross-margin-weighted value of a customer over their expected lifespan. More sophisticated models incorporate discount rates, expansion revenue, and cohort-based retention curves.

The CLTV-to-CAC ratio is a key benchmark. A ratio of 3:1 or higher is considered healthy — meaning each customer generates three times what it costs to acquire them. If your ratio is below 1:1, you are losing money on every customer you acquire.

FAQ

Common questionsanswered.

What is a good CLTV-to-CAC ratio?+
A 3:1 ratio is the most commonly cited benchmark. Below 1:1 means you are losing money per customer. Above 5:1 may indicate you are under-investing in growth.
Should I use monthly or annual churn for CLTV?+
Use monthly churn with monthly ARPA, or annual churn with annual ARPA. Be consistent — mixing monthly and annual figures will produce incorrect results.
How do I improve CLTV?+
There are three levers: increase ARPA through upsells or pricing changes, improve gross margins by reducing cost of service, or reduce churn through better retention strategies.

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