Customer LTV = Average Purchase × Purchases per Year × Customer Lifespan. Essential for marketing budgets.
If LTV =
Reach for this calculator when you need to present a business metric to stakeholders. Accurate, consistently-defined figures command more credibility than estimates, particularly in financial discussions.
A common mistake is comparing metrics that use different definitions — gross margin versus net margin, revenue versus profit, customer count versus paying customer count. Always confirm the definition of each input before comparing results across periods or sources.
A startup founder uses the calculator to determine break-even point: fixed monthly costs £12,000, variable cost per unit £18, selling price £42. Break-even is 500 units per month — a concrete sales target that the team can evaluate against pipeline and capacity.
3:1 or higher. Below 1:1 means you're losing money on every customer acquired.
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