LTV Calculator

Use this calculator to estimate customer lifetime value based on purchase value, purchase frequency, and lifespan.

What this calculator does

The LTV calculator estimates how much revenue a customer generates over the full relationship with a business.

It is useful for:

• customer value analysis
• retention planning
• acquisition strategy
• SaaS and ecommerce forecasting

LTV Formula

LTV = Average Purchase Value × Purchase Frequency × Customer Lifespan

Where:

• Average Purchase Value = average amount spent per order
• Purchase Frequency = average number of purchases per period
• Customer Lifespan = how long a customer stays active

Example calculation

If:

• Average purchase value = 50
• Purchase frequency = 4
• Customer lifespan = 3 years

Then:

• LTV = 50 × 4 × 3
• LTV = 600

What is customer lifetime value?

Customer lifetime value is the estimated total revenue a customer generates over the entire relationship with a business.

It helps show the long-term value of acquiring and retaining customers.

Why LTV matters

LTV helps businesses:

• understand customer value
• compare acquisition costs to long-term revenue
• improve marketing efficiency
• make better retention decisions

When to use this calculator

Use this calculator when you want to:

• estimate long-term customer value
• compare LTV to CAC
• improve retention strategy
• evaluate subscription or repeat-purchase models

Common mistakes

Common mistakes include:

• using unrealistic customer lifespan assumptions
• ignoring changes in purchase behavior
• comparing LTV without context
• confusing revenue with profit

LTV vs CAC

These metrics are often used together.

• LTV shows the long-term value of a customer
• CAC shows how much it costs to acquire that customer

A healthy business usually aims for LTV to be significantly higher than CAC.

Related calculations

You may also want to use:

• CAC Calculator
• Marketing ROI Calculator
• ROAS Calculator

FAQs

What is LTV?

LTV is the estimated total revenue a customer generates during the relationship with a business.

How do you calculate LTV?

LTV = Average Purchase Value × Purchase Frequency × Customer Lifespan.

Why is LTV important?

It helps businesses understand long-term customer value and make better acquisition decisions.

What is the difference between LTV and CAC?

LTV measures customer value, while CAC measures acquisition cost.