Customer Lifetime Value Calculator
Calculate how much revenue a customer generates over their entire relationship with your business. Enter purchase data below to see CLV instantly.
Free Customer Lifetime Value (CLV) Calculator
The SmarterSources Customer Lifetime Value Calculator helps business owners, marketers, and founders understand the total revenue a customer generates throughout their relationship with a company. Knowing your CLV is essential for making informed decisions about marketing spend, pricing, and customer retention strategies.
How to Calculate Customer Lifetime Value
The basic CLV formula is straightforward: CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan. For example, if a customer spends $50 per order, buys 4 times per year, and remains a customer for 5 years, the CLV is $50 × 4 × 5 = $1,000. If you know your gross margin, you can calculate a margin-adjusted CLV that reflects actual profit rather than revenue.
Why Customer Lifetime Value Matters
CLV is one of the most important metrics for any business. It helps you determine how much to spend on customer acquisition, identify your most valuable customer segments, forecast future revenue, and evaluate whether your business model is sustainable. Companies that understand CLV can allocate marketing budgets more effectively and invest in the retention strategies that drive the highest returns.
How to Improve Customer Lifetime Value
There are four primary levers for increasing CLV: increase average order value through upselling, cross-selling, and bundling; increase purchase frequency with loyalty programs, email marketing, and subscription models; extend customer lifespan by improving customer service, product quality, and engagement; and improve gross margins through pricing optimization and cost reduction.
CLV to CAC Ratio
The CLV:CAC ratio compares the lifetime value of a customer to the cost of acquiring them. A ratio of 3:1 is widely considered the benchmark for a healthy, scalable business. Below 1:1 means you are losing money on every customer acquired. Above 5:1 may indicate you are under-investing in growth and leaving market share on the table.
Frequently Asked Questions
How do you calculate Customer Lifetime Value?
CLV = Average Purchase Value × Purchase Frequency × Average Customer Lifespan. For a more precise figure, multiply by your gross margin percentage to get the profit-based CLV.
What is a good CLV to CAC ratio?
A CLV:CAC ratio of 3:1 or higher is generally considered healthy. This means you earn at least three dollars in lifetime value for every dollar spent acquiring a customer. Ratios below 1:1 indicate unsustainable customer economics.
What is the difference between CLV and LTV?
CLV (Customer Lifetime Value) and LTV (Lifetime Value) are the same metric. Both refer to the total revenue or profit a customer generates over their relationship with your business. The terms are used interchangeably across industries.
Is my data safe?
Yes. This calculator runs entirely in your browser. No data is sent to any server and nothing is stored.