Customer Lifetime Value (CLV) Calculator

Enter Calculation

Average Order Value ($)

Purchase Frequency (orders/year)

Customer Lifespan (years)

Results

Customer Lifetime Value

$900

total revenue per customer

Average Order Value	$75
Purchase Frequency	4 orders/year
Customer Lifespan	3 years
Annual Customer Value	$300 /year

What Is Customer Lifetime Value?

Customer Lifetime Value (CLV or LTV) is the total revenue a business can expect from a single customer over the entire duration of their relationship. It's one of the most important metrics in marketing and SaaS, because it tells you how much you can afford to spend acquiring a customer while staying profitable. A healthy business keeps its customer acquisition cost (CAC) well below its CLV — a common rule of thumb is a CLV:CAC ratio of 3:1 or higher.

How to Use This Calculator

Enter three numbers: your Average Order Value (the typical amount a customer spends per purchase), your Purchase Frequency (how many times the average customer buys per year), and your Customer Lifespan (how many years a customer typically stays with you). The calculator instantly multiplies them to give you the total lifetime value, plus the annual value per customer.

The Formula Explained

The simple CLV model is:

$$\text{CLV} = \text{Average Order Value} \times \text{Purchase Frequency} \times \text{Customer Lifespan}$$

Average Order Value comes from total revenue divided by number of orders. Purchase Frequency is the number of orders divided by number of unique customers in a period. Customer Lifespan is the average length of time a customer keeps buying, often estimated as \(1 \div \text{churn rate}\).

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The three inputs that combine to produce Customer Lifetime Value.

Worked Example

Imagine an online store where the average order is $75, a typical customer orders 4 times per year, and customers stay for 3 years. The CLV is $$75 \times 4 \times 3 = \$900$$ The annual customer value is \(75 \times 4 = \$300\) per year. If acquiring a customer costs $150, the CLV:CAC ratio is \(900 \div 150 = 6{:}1\), which is very healthy.

Repeated purchases over the customer lifespan accumulate into total lifetime value.

FAQ

Should I use revenue or profit? This basic model uses revenue. For a profit-based CLV, multiply the result by your gross margin percentage.

How do I find customer lifespan? If you know your annual churn rate, \(\text{lifespan} \approx 1 \div \text{churn}\). For example, 25% churn implies a 4-year average lifespan.

Why does CLV matter? It sets the ceiling on what you can spend to acquire and retain customers and helps prioritize high-value segments.