Customer Lifetime Value (CLV) Calculator
Estimate the gross profit an average customer brings in over their lifetime and the most you can spend to acquire one.
Customer numbers
Lifetime value
Customer lifetime value (gross profit)
Enter your numbers to see lifetime value.
What customer lifetime value tells you
Customer lifetime value (CLV) is the gross profit an average customer brings in over the whole relationship with your business. This calculator multiplies average order value by purchases per year and by customer lifespan to get lifetime revenue, then applies your gross margin to turn that revenue into profit.
The 3:1 CLV to CAC rule
Healthy unit economics usually need CLV of at least three times your customer acquisition cost (CAC). Below 3:1, you are likely losing money once overhead, churn and discounts are counted. Above 5:1, you are probably underinvesting in growth and could afford to acquire customers faster.
Why CLV matters more than first purchase revenue
Many businesses set their acquisition budget against the first order. That is how small businesses run out of cash, or leave growth on the table. The right budget is tied to lifetime profit. Industries with high repeat rates, such as SaaS, consumables and services, have plenty of room between CLV and CAC. One-off purchase categories do not.
Frequently asked questions
Should I use revenue or gross profit for CLV?
Use gross profit when you compare CLV with acquisition cost. Revenue-based CLV looks bigger but ignores the cost of delivering your product, so it makes almost any CAC look affordable.
How do I estimate customer lifespan?
If you know your yearly churn rate, lifespan is roughly 1 divided by churn. A 25% yearly churn rate means customers stay about four years on average.
Should I calculate CLV by segment?
Yes, if you can. Customers from different channels, plans or regions often have very different lifetime values, and a single average can hide your best and worst segments.