Customer LTV Calculator
What is a customer really worth to you — and how much is safe to spend to win one? Free, instant, no spreadsheets.
Your customer
How often a typical customer buys, on average.
How long a customer typically keeps buying from you.
What's left after the direct cost of what you sell. Leave at 100 to use pure revenue.
Your customer's value
Enter your details to see your customer's lifetime value
Why lifetime value matters
It's the number that tells you whether your growth spending actually makes sense.
It puts a real ceiling on ad and marketing spend
Without knowing what a customer is worth, any acquisition cost can look reasonable. LTV gives you the number you should never spend past.
It protects you from growth that loses money
Adding customers isn't automatically good — if each one costs more to win than they're worth, growth is quietly draining the business.
It shows you where to actually invest
A higher LTV means more room to spend on acquisition, retention, or service — this tells you which lever is worth pulling.
It reframes retention as revenue
Keeping a customer one extra year is often cheaper than winning a new one — LTV makes that trade-off visible in real numbers.
Frequently asked questions
What is customer lifetime value (LTV)?
LTV is the total value a typical customer brings your business over the entire time they keep buying from you — not just their first purchase.
How is LTV calculated?
Multiply average order value by how often a customer buys per year, by your gross margin, by how many years they typically stay a customer. That gives you the profit a typical customer generates over their lifetime.
What's a good LTV to CAC ratio?
3:1 or higher is the widely used rule of thumb — a customer should be worth at least three times what it costs to acquire them. Below 1:1 means you're losing money on every new customer.
Why does gross margin matter here?
Revenue isn't profit. If you only have 40% margin, a customer spending £1,000 with you is really only worth £400 towards your costs and profit — margin turns revenue into a realistic value figure.
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