Estimate the total revenue a customer will generate over their relationship with your business. Calculate LTV, payback period, and the critical LTV:CAC ratio.
Average amount per transaction
Average orders per customer per month
% of customers lost each month
Cost to acquire one customer
LTV
$4,000
per customer
LTV:CAC Ratio
33.3:1
Healthy
Avg Customer Lifespan
20.0
months
Annual Rev / Customer
$2,400
CAC Payback
0.6
months
Year 1
$183,856
cumulative revenue
+$171,856
net after CAC
Year 2
$283,204
cumulative revenue
+$271,204
net after CAC
Year 3
$336,888
cumulative revenue
+$324,888
net after CAC
< 1:1
Losing Money
You spend more to acquire a customer than they generate in lifetime value
1:1 - 3:1
Growth Mode
Sustainable but may need optimizing. Aim for 3:1+ for healthy unit economics
> 3:1
Healthy
Strong unit economics. Each customer generates solid return on acquisition cost
Your ratio: 33.3:1
Customer Lifetime Value (LTV or CLV) estimates the total revenue you can expect from a single customer over the entire relationship. It is calculated by multiplying the average purchase value by purchase frequency and average customer lifespan. When paired with your Customer Acquisition Cost (CAC), it tells you whether your business model is sustainable.
A ratio of 3:1 is generally considered healthy — you earn 3x what you spent to acquire each customer. Below 1:1 means you are losing money per customer. Above 5:1 may mean you are under-investing in growth and leaving market share on the table.
The three levers are: increase average purchase value (upselling, premium tiers), increase purchase frequency (loyalty programs, engagement), and reduce churn (better onboarding, customer success). Even small improvements in retention can dramatically increase LTV.
Churn rate is the percentage of customers who stop buying in a given period. A 5% monthly churn means you lose 5% of customers each month, giving an average customer lifespan of 20 months. Lower churn = longer lifespan = higher LTV.
Use gross margin (revenue minus cost of goods sold) for a more accurate picture. A customer paying $100/month is not worth $100/month if your cost to serve them is $60. Using gross margin gives you LTV that reflects actual profit potential.
Customer Acquisition Cost Calculator
Calculate how much it costs to acquire each new customer. Enter your marketing and sales expenses to find your CAC and evaluate channel efficiency.
Revenue Growth Calculator
Calculate your revenue growth rate and project future revenue. Compare period-over-period growth and see how your trajectory compounds over time.