Customer Lifetime Value Calculator

Customer LTV = Average Purchase × Purchases per Year × Customer Lifespan. Essential for marketing budgets.

What this calculator does

If LTV =

,440 and CAC = $200, your LTV:CAC ratio is 7.2× — excellent unit economics.

When to use this calculator

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.

Common mistakes

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.

Real-world scenarios

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.

Frequently asked questions

What is a good LTV:CAC ratio?

3:1 or higher. Below 1:1 means you're losing money on every customer acquired.