Customer Lifetime Value (LTV) Calculator
Calculate the total revenue expected from a customer over their lifetime. Understand your LTV to optimize acquisition spend and drive sustainable growth.
Customer Lifetime Value (LTV) Calculator
Calculate the total revenue expected from a customer over their lifetime. Understand your LTV to optimize acquisition spend and drive sustainable growth.
Generated: 2/22/2026, 12:34:01 AM | AskSMB.io
Input Your Metrics
Average revenue per purchase
Average number of purchases per customer per year
Average number of years a customer stays active
All values must be greater than zero
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Customer Lifetime Value (LTV)
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Annual Customer Value
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Growth Readiness Indicator
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LTV to CAC Ratio Guidance
For sustainable growth, your LTV should be at least 3x your Customer Acquisition Cost (CAC).
• 3:1 or higher: Healthy, scalable growth
• 1:1 to 3:1: Risky, optimize retention or reduce CAC
• Below 1:1: Unprofitable, urgent action needed
How the Customer Lifetime Value (LTV) Calculator Works
What is customer lifetime value?
Customer Lifetime Value (LTV or CLV) is a metric that represents the total revenue a business can reasonably expect from a single customer account throughout the business relationship. It's one of the most important metrics for understanding the long-term value of your customer base and making informed decisions about marketing spend, customer service investments, and growth strategies.
Why LTV matters for growth
Understanding your LTV is critical for sustainable business growth. It tells you:
- How much you can afford to spend on customer acquisition
- Which customer segments are most valuable to your business
- Whether your unit economics support scaling
- How retention improvements impact bottom-line revenue
- Where to invest in customer experience and service
Without knowing your LTV, you're flying blind on critical business decisions and may overspend or underspend on growth initiatives.
LTV vs CAC explained
The LTV to CAC ratio is perhaps the most important metric for evaluating business health and scalability:
- LTV (Customer Lifetime Value): Total revenue from a customer
- CAC (Customer Acquisition Cost): Total cost to acquire a customer
- LTV:CAC Ratio: LTV divided by CAC
A healthy ratio is 3:1 or higher. This means for every dollar you spend acquiring a customer, you earn three dollars back over their lifetime. Ratios below 1:1 indicate you're losing money on each customer acquired.
What is a good LTV?
There's no universal "good" LTV—it depends on your industry, business model, and CAC. However, general guidelines include:
- E-commerce: $100-$500+ depending on product category
- SaaS (B2B): $1,000-$50,000+ depending on plan and market
- SaaS (B2C): $100-$1,000+ for consumer subscriptions
- Professional Services: $5,000-$100,000+ for agency/consulting clients
More important than the absolute number is ensuring your LTV is at least 3x your CAC, allowing for profitable scaling.
How to increase customer lifetime value
You can improve LTV by influencing any of the three components in the calculation:
1. Increase Average Order Value:
- Upsell premium products or features
- Cross-sell complementary products
- Bundle products for higher perceived value
- Implement tiered pricing strategies
2. Increase Purchase Frequency:
- Launch subscription or membership programs
- Send targeted email campaigns and reminders
- Create loyalty or rewards programs
- Introduce consumable or replenishable products
3. Extend Customer Lifespan:
- Improve customer service and support
- Invest in customer success and onboarding
- Build community and engagement
- Continuously improve product quality and value
- Implement churn prediction and intervention
Example Calculation
Example: Online Subscription Box Service
Average order value: $50
Purchase frequency: 4 per year (quarterly subscription)
Customer lifespan: 3 years
Annual customer value: $50 × 4 = $200
Customer lifetime value: $200 × 3 = $600
With a $600 LTV, this business could spend up to $200 per customer on acquisition (3:1 ratio) while maintaining healthy unit economics.
Frequently Asked Questions
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