Customer Lifetime Value Calculator

Knowing how much a customer is worth to your business over time is one of the most powerful metrics for growth. That’s where Customer Lifetime Value (CLV) comes in. Whether you're running a startup, an e-commerce business, or a SaaS company, understanding your CLV helps you make smarter marketing, sales, and customer service decisions.

That’s why we’ve developed this Free Customer Lifetime Value Calculator – a tool designed to help you calculate CLV easily, accurately, and in just a few clicks.

What is Customer Lifetime Value?

Customer Lifetime Value (CLV) is the total amount of revenue a business can expect from a single customer account throughout their relationship. It helps you measure the long-term value each customer brings and how much you can afford to spend to acquire new ones.

Customer Lifetime Value Formula

There are different ways to calculate CLV depending on your business model. Below are the common formulas:

1. Basic CLV Formula

CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan

2. Profit-Based CLV Formula

CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan × Profit Margin

3. Predictive CLV Formula

CLV = Average Monthly Transactions × Average Order Value × Gross Margin × Average Lifespan in Months

4. Advanced CLV Formula with Discount Rate & Retention

CLV = Σ (Profit × (Retention Rate ^ t)) / (1 + Discount Rate) ^ t

Where t is the number of years.

How to Use the Customer Lifetime Value Calculator

Using our CLV calculator is simple:

Step-by-step Instructions:

1. Choose a calculation method (Basic, Profit-Based, Predictive, or Advanced).
2. Enter values like average order value, purchase frequency, profit margin, and customer lifespan.
3. Click “Calculate” to get your Customer Lifetime Value instantly.
4. The calculator will also generate a chart showing how the value grows over time.

Example of CLV Calculation

Let’s say your customer spends $100 per order, buys 5 times a year, and stays with you for 3 years.

Using the basic CLV formula:

CLV = 100 × 5 × 3 = $1,500

If your profit margin is 60%:

CLV = 100 × 5 × 3 × 0.60 = $900

Why CLV Matters for Your Business

• Improves marketing ROI – You’ll know how much to invest in acquiring a customer.
• Guides pricing and sales strategy – High CLV means you can afford to offer better deals.
• Increases customer retention – A longer lifespan means higher lifetime value.
• Predicts long-term growth – Helps in business forecasting and planning.

Final Verdict

The Customer Lifetime Value Calculator is more than just a math tool – it’s a strategic asset. By understanding your CLV, you can optimize your customer acquisition cost (CAC), set realistic growth targets, and build stronger relationships with your customers.

Whether you're planning for the next 5 years or just want to know how much each customer is worth today, our calculator gives you the answers in seconds.

Remember: a good CLV should ideally be 3x your CAC. If not, it's time to tweak your strategy.

FAQs

What is the formula for LTV?

The basic LTV formula is:

LTV = Average Order Value × Purchase Frequency × Customer Lifespan

How do you calculate customer lifetime value?

You can calculate it manually using one of the CLV formulas above or use our calculator for instant results.

How to calculate CLV for 5 years?

Estimate average yearly revenue from a customer and multiply by 5, or use the advanced CLV formula that includes discount rates and retention.

How to calculate CLV in Excel?

Use Excel formulas like:

= (AOV * Frequency * Lifespan) And include profit margin or retention rate if needed.

What’s a good CLV?

A good rule of thumb is: CLV ≥ 3 × CAC (Customer Acquisition Cost)