Free tool with optional AI assistance

Free Customer Lifetime Value Calculator

Calculate simple and gross-margin-adjusted customer lifetime value, then model gains from better retention or purchase frequency.

Calculate Customer Lifetime Value

Use averages from one customer segment and a consistent period.

Local calculation

Your lifetime value analysis will appear here

Enter order value, frequency, lifespan, margin and optional churn.

Practical guide

How to Use the Customer Lifetime Value Calculator

Customer lifetime value is most actionable when calculated by cohort or segment and updated as retention behavior changes.

Treat churn-derived lifespan carefully

The reciprocal of churn is a convenient estimate. Subscription cohorts and non-contractual retail customers often need more detailed retention models.

Connect LTV with acquisition cost

Compare this output with the <a href="/customer-acquisition-cost-calculator/">Customer Acquisition Cost Calculator</a> and <a href="/ltv-cac-ratio-calculator/">LTV:CAC Ratio Calculator</a>.

Formula and example

Customer Lifetime Value Formula

Customer Lifetime Value=Order value × annual frequency × customer lifespan

Illustrative customer segment
AOV	Frequency	Lifespan	Gross margin LTV
$85	4 per year	3 years	$612

Questions answered

Customer Lifetime Value Calculator FAQs

How is customer lifetime value calculated?

A common simple formula multiplies average order value by annual purchase frequency and customer lifespan.

Why adjust LTV for gross margin?

Revenue LTV can overstate the value available to cover acquisition and overhead. Margin-adjusted LTV estimates lifetime gross profit.

How does churn affect lifespan?

A simple approximation uses one divided by annual churn rate. This should be treated as a planning estimate, not a cohort model.

Should LTV be compared with CAC?

Yes. Use the LTV:CAC ratio calculator to compare customer value with acquisition cost on a consistent basis.