CLTV Calculator
Calculate customer lifetime value from your metrics
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
Customer Lifetime Value, the total expected revenue from one customer over their entire relationship with your business.
Average Revenue Per User, the mean monthly or annual revenue generated per customer across all pricing tiers.
The percentage of revenue remaining after subtracting the direct costs of delivering your product, indicating production efficiency.
The average duration a customer remains subscribed before churning, typically calculated as the inverse of the churn rate.
Formulas Used
Multiply average revenue by margin and lifespan to determine how much gross profit a typical customer generates over their lifetime.
Invert the monthly churn rate to estimate how many months the average customer stays before cancelling.
Three simple steps
Enter your metrics
Input your average revenue per account, gross margin percentage, and monthly or annual churn rate.
Calculate lifetime value
The calculator computes your CLTV using standard formulas and shows the expected customer lifespan.
Review profitability
See your CLTV alongside key ratios like CLTV-to-CAC to assess long-term unit economics.
Built for founders like you
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.
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.
Common questions
What is a good CLTV-to-CAC ratio?+
Should I use monthly or annual churn for CLTV?+
How do I improve CLTV?+
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