💼 CLTV Calculator
Calculate Customer Lifetime Value
Average amount spent per purchase
Number of purchases per year
Average number of years a customer stays
Gross profit margin percentage
How to Use This Calculator
Enter Average Order Value
Input the average amount a customer spends per purchase or order.
Enter Purchase Frequency
Enter how many times per year a customer makes a purchase (e.g., 4 for quarterly purchases).
Enter Customer Lifespan
Enter the average number of years a customer continues to make purchases.
Enter Gross Margin
Enter the gross profit margin percentage (revenue minus cost of goods sold, divided by revenue).
Review CLTV
See the customer lifetime value - the total profit you can expect from a customer over their lifetime. Use this to determine customer acquisition costs and marketing budgets.
Formula
Total Revenue = Average Order Value × Purchase Frequency × Customer Lifespan
CLTV = Total Revenue × Gross Margin
Example Calculation:
If AOV $50, frequency 4/year, lifespan 5 years, margin 40%:
• Total revenue = $50 × 4 × 5 = $1,000
• CLTV = $1,000 × 40% = $400
About CLTV Calculator
A Customer Lifetime Value (CLTV) calculator helps you calculate the total profit a customer generates over their entire relationship with your business. CLTV is a key metric for understanding customer value, determining customer acquisition costs, and making informed decisions about marketing and customer retention. This calculator uses the formula: CLTV = Average Order Value × Purchase Frequency × Customer Lifespan × Gross Margin. Understanding CLTV helps you optimize marketing spend, improve customer retention, and make data-driven business decisions.
When to Use This Calculator
- Customer Value Analysis: Understand the value of your customers
- Marketing Budget: Determine how much to spend on customer acquisition
- Retention Strategy: Plan customer retention efforts
- Business Planning: Make data-driven business decisions
Understanding CLTV
- Customer Value: CLTV shows total profit from a customer
- Acquisition Cost: Compare CLTV to customer acquisition cost (CAC)
- Retention Impact: Increasing customer lifespan significantly increases CLTV
- Marketing ROI: Use CLTV to measure marketing return on investment
Why Use Our Calculator?
- ✅ CLTV Calculation: Calculate customer lifetime value
- ✅ Business Planning: Make data-driven decisions
- ✅ Marketing Optimization: Optimize marketing spend
- ✅ Customer Strategy: Plan customer acquisition and retention
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is Customer Lifetime Value (CLTV)?
Customer Lifetime Value (CLTV) is the total profit a customer generates over their entire relationship with your business. CLTV accounts for the average order value, purchase frequency, customer lifespan, and gross margin. It helps you understand how much a customer is worth to your business and how much you can afford to spend on acquiring and retaining customers.
How do I calculate CLTV?
CLTV is calculated as: CLTV = Average Order Value × Purchase Frequency × Customer Lifespan × Gross Margin. First, calculate total revenue per customer (AOV × frequency × lifespan), then multiply by gross margin to get profit. This calculator does all the calculations for you - just enter your values and get your CLTV.
What's a good CLTV?
A good CLTV depends on your industry, business model, and customer acquisition cost (CAC). Generally, CLTV should be 3-5 times your CAC to be profitable. For example, if your CAC is $50, your CLTV should be at least $150-$250. Higher CLTV means more profit per customer and more flexibility in marketing spend. Compare your CLTV to industry benchmarks and your own historical data.
How can I increase CLTV?
You can increase CLTV by: (1) Increasing average order value (upselling, cross-selling, bundles), (2) Increasing purchase frequency (email marketing, loyalty programs, subscriptions), (3) Increasing customer lifespan (improving retention, reducing churn), (4) Increasing gross margin (reducing costs, increasing prices). Focus on strategies that have the biggest impact on your CLTV calculation.