Customer Lifetime Value Calculator: calculate customer lifetime value for your business. Formula, benchmarks, and practical tips included.
Simple subscription LTV = Monthly gross margin × Average lifetime (months)
E-commerce LTV = AOV × Purchase frequency × Gross margin % × Customer lifespan (years)
Discounted LTV = Σ [Monthly margin ÷ (1 + monthly discount rate)^month] over customer lifetime
Worked example (subscription): Monthly subscription 50. Gross margin 75%. Monthly gross margin = 37.50. Average customer stays 28 months. LTV = 37.50 × 28 = 1,050. If CAC = 300, LTV:CAC = 3.5× — healthy.
Worked example (e-commerce): AOV 80. Purchases 4×/year. Gross margin 45%. Average lifespan 3.5 years. LTV = 80 × 4 × 0.45 × 3.5 = 504.