Customer Lifetime Value Calculator
Customer lifetime value (LTV) is the profit a typical customer brings in over the whole relationship. Compared with the cost of acquiring that customer (CAC), it shows whether growth is paying for itself.
Enter your figures below. Results update as you type.
Customer lifetime value$576.004.8 times the cost to acquire
- Losing money under 1
- Thin 1-3
- Healthy 3+
- Revenue per customer
- $960.00
- Profit after acquisition cost
- $456.00
- Months to earn back the acquisition cost
- 7.5
How the Customer Lifetime Value calculation works
LTV = order value x purchases per year x years x gross margin
A customer who spends $80 four times a year for three years, at a 60% margin, is worth $576. Against a $120 acquisition cost that is a ratio of 4.8, and the cost is earned back in 7.5 months.
Frequently asked questions
What is a good LTV to CAC ratio?
3 to 1 is the usual benchmark. Below 1 the business loses money on each customer. A ratio far above 3 can suggest room to spend more on growth.
How do I calculate customer acquisition cost?
Divide total sales and marketing spending in a period by the number of new customers gained in it. Spending $12,000 to win 100 customers is a CAC of $120.
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