Mr Calcu | Reveal your most valuable customers and optimize profits with our quick, smart LTV calculator.

Discover and boost your ROI with our LTV calculator. Accurately estimate customer value and uncover insights that drive loyal, high-impact growth.

Ltv (Lifetime Value) Calculator

Average Order Value ($)

Purchase Frequency (per year)

Customer Lifespan (years)

Customer Acquisition Cost ($)

LTV (Lifetime Value) Calculator Guidelines

You're just a few steps away from smarter customer insights.

How to Use the LTV Calculator

Step-by-Step Inputs

Average Order Value (AOV): Divide total revenue by the number of orders in a selected time period.
Purchase Frequency: Count the number of purchases an average customer makes per year.
Customer Lifespan: Estimate how many years a typical customer continues buying from you.
Gross Margin: Calculate as (Revenue - Cost of Goods Sold) / Revenue. Enter this as a decimal (e.g., 0.5 for 50%).

Best Practices

Ensure consistency in time units across all inputs.
Run multiple scenarios to evaluate marketing ROI under different assumptions.
Segment customers by behavior, product line, or geography to generate accurate LTV ranges.
Review LTV monthly or quarterly to reflect updated business performance.

LTV (Lifetime Value) Calculator Description

What is Customer Lifetime Value (LTV)?

Customer Lifetime Value (LTV) quantifies the total monetary value a business expects from a customer throughout the duration of their relationship.

Why LTV Matters

Guides marketing budget decisions
Optimizes customer acquisition and retention strategies
Highlights your most profitable customer segments

Core LTV Formula

LTV = (Average Order Value) × (Purchase Frequency per Year) × (Customer Lifespan in Years) × (Gross Margin)

If you already know Customer Value (CV):

Customer Value = Average Order Value × Purchase Frequency

LTV = Customer Value × Customer Lifespan × Gross Margin

Pro Tip: For subscription businesses, use monthly recurring revenue (MRR) and average customer tenure to simplify calculations.

Real-World Case Studies

Case Study 1: Subscription Box Business

Average Order Value: $40
Frequency: Monthly (12/year)
Customer Lifespan: 1.5 years
Gross Margin: 60%

LTV = $40 × 12 × 1.5 × 0.60 = $432

Case Study 2: SaaS Company

Monthly Revenue: $100
Tenure: 3 years
Gross Margin: 75%

LTV = $100 × 12 × 3 × 0.75 = $2,700

Advanced Tips

Use customer segmentation to refine LTV by cohort
Model churn rates for predictive LTV
Apply a discount rate for Net Present Value (NPV) if forecasting long-term cash flows

Start calculating your LTV now to uncover untapped revenue and make smarter growth decisions!

Example Calculation

Average Order Value	Purchase Frequency	Customer Lifespan	Gross Margin	LTV
$100	4 times/year	5 years	40%	$800.00
$50	2 times/year	3 years	30%	$90.00
$120	12 times/year	2 years	50%	$1,440.00
$0	0 times/year	0 years	0%	$0.00
$200	1 time/year	10 years	100%	$2,000.00

Frequently Asked Questions

LTV, or Lifetime Value, is the total value a customer brings to a business over their lifetime.

LTV is calculated using average order value, purchase frequency, customer lifespan, and gross margin.

LTV helps businesses understand the long-term value of their customer relationships and make informed decisions about marketing strategies and customer retention.

High churn reduces customer lifespan, leading to a lower LTV. This may suggest issues with product-market fit or retention strategies.

LTV itself does not include CAC, but comparing LTV to CAC (LTV:CAC ratio) helps evaluate the profitability of acquiring new customers.

Yes. If the gross margin is negative or the acquisition cost exceeds expected revenue, the LTV can be negative—indicating financial loss per customer.

Use historical data to average their purchase frequency over time. For irregular purchases, consider modeling behavior probabilistically.

Subscription models typically have more predictable and higher LTVs due to recurring revenue, while one-time models may depend more on upsells or repurchase rates.

Review and update your LTV quarterly or when significant changes occur in pricing, churn, or customer behavior to ensure your estimates remain actionable.

Mr Calcu | Reveal your most valuable customers and optimize profits with our quick, smart LTV calculator.

Ltv (Lifetime Value) Calculator

LTV (Lifetime Value) Calculator Guidelines

How to Use the LTV Calculator

Step-by-Step Inputs

Best Practices

LTV (Lifetime Value) Calculator Description

What is Customer Lifetime Value (LTV)?

Why LTV Matters

Core LTV Formula

Real-World Case Studies

Case Study 1: Subscription Box Business

Case Study 2: SaaS Company

Advanced Tips

Example Calculation

Frequently Asked Questions

What is LTV?

How is LTV calculated?

Why is LTV important?

What happens if customer churn is high?

Should LTV include customer acquisition cost (CAC)?

Can LTV be negative?

What if my customers purchase irregularly?

How does LTV change with subscription vs. one-time purchase models?

How often should I update my LTV calculations?

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