Customer Lifetime Value (LTV) Calculator

Estimate the total profit a customer generates over their relationship with you.

What the Customer Lifetime Value (LTV) Calculator does

Lifetime value estimates the gross profit a customer generates before they leave. It is driven mostly by churn — because lifespan is the reciprocal of the churn rate, reducing churn is the highest-leverage way to raise LTV.

Formula

Average lifespan = 1 ÷ Churn rate
LTV = Average revenue per period × Gross margin × Lifespan
Payback period = CAC ÷ (Revenue × Gross margin)

Inputs explained

Input	Unit	Required	Notes
Average revenue per customer	selected currency	Yes	Per period — monthly for subscriptions. Accepts more than 0.
Revenue period	one of 3 options	Yes	—
Gross margin	%	Yes	—
Customer lifespan from	one of 2 options	Yes	—
Churn rate per period	%	In some modes	Shown Customer lifespan from is Churn rate.
Average lifespan	periods	In some modes	Accepts more than 0. Shown Customer lifespan from is Known average lifespan.
Customer acquisition cost	selected currency	Optional	Accepts 0 or more.
Currency	one of 10 options	Optional	—

How to use it

Choose Revenue period and Customer lifespan from.
Enter Average revenue per customer and Gross margin.
Fill in the remaining inputs the form shows for your choice.
Optionally add Customer acquisition cost.
Select Calculate.

Worked example

$80 monthly revenue, 75% gross margin, 4% monthly churn, $600 CAC.

Revenue: 80
Margin: 75
Churn: 4
CAC: 600

Lifespan 25 months, LTV $1,500, a 2.5:1 ratio with a 10-month payback.

Frequently asked questions

Should LTV use revenue or gross profit?

Gross profit. Revenue-based LTV ignores the cost of delivering the service and can make an unprofitable business look healthy.

Why does churn matter so much?

Lifespan is 1 divided by churn, so the relationship is non-linear. Cutting monthly churn from 5% to 2.5% doubles the customer lifespan from 20 months to 40.