Customer Lifetime Value (LTV) Calculator

Calculate the true lifetime value of your customers and discover your break-even timeline.

Subscription-based, churn-driven retention model

Scenario:
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LTV = —

Live Insights

Direct LTV (NPV)
$0
Nominal: $0
Net Profit
$0
After Acquisition Cost
LTV:CAC Ratio
0.0x
Payback Period
—
Avg Customer Life
—
Monthly Gross Profit
—
Max CAC (3:1 Target)
—
+ Viral Lift ⓘ
$0
Composite LTV
$0
⚠️ Composite includes referral value — use Direct LTV for CAC decisions

Break-Even Analysis

Value
CAC
Profit Zone
Sensitivity Analysis What-If ±10%
Variable −10% LTV +10% LTV Impact

Unit Economics Guide

01

Select Model

Choose your business type (SaaS, E-Com, Retail) to load industry-standard metrics and default presets automatically.

02

Input Data

Enter specialized metrics like Churn Rate, AOV, or Purchase Frequency to build your unique unit economics profile.

03

Analyze Results

View your projected LTV, Net Profit, and LTV:CAC ratios. Explore sensitivity analysis to discover your biggest growth lever.

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How to Use This Calculator

1

Enter Revenue Metrics

Input average revenue per customer, purchase frequency, and gross margin percentage.

2

Set Retention Data

Enter customer lifespan in months or years, or use churn rate to calculate expected lifetime automatically.

3

Analyze Lifetime Value

See LTV with breakdowns by segment, the LTV:CAC ratio, and sensitivity analysis across retention scenarios.

Formula & Methodology

Basic LTV

LTV = Average Revenue Per User × Gross Margin × Average Customer Lifespan

Simple multiplication model for businesses with predictable retention.

LTV from Churn

LTV = (ARPU × Gross Margin) / Monthly Churn Rate

For subscription businesses — derives lifespan from churn rate.

Discounted LTV

LTV = ∑ (Margint / (1 + d)t) for t = 1 to n

Accounts for the time value of money using discount rate d.

About this calculation · Accuracy & Methodology

Key Terms

LTV
Lifetime Value — the total net profit expected from a customer over the entire relationship.
ARPU
Average Revenue Per User — typically calculated monthly or annually.
Churn Rate
The percentage of customers who stop paying during a given period.
Gross Margin
Revenue minus cost of goods sold, expressed as a percentage.
Cohort Analysis
Tracking LTV for groups of customers acquired in the same period to identify trends.

Real-World Examples

Example 1

SaaS Product

ARPU: $99/mo, Gross Margin: 80%, Monthly Churn: 3%

LTV: ($99 × 0.80) / 0.03 = $2,640. Average lifespan: 33 months.

Example 2

E-Commerce Store

AOV: $65, Purchases/Year: 4.2, Margin: 35%, Lifespan: 3.5 years

LTV: $65 × 4.2 × 0.35 × 3.5 = $335.79.

LTV Impact of Churn Reduction

Monthly ChurnAvg LifespanLTV (at $100 ARPU, 80% margin)
8%12.5 months$1,000
5%20 months$1,600
3%33 months$2,667
2%50 months$4,000
1%100 months$8,000

Maximizing Customer Lifetime Value

LTV Is a Growth Lever

Improving LTV is often more profitable than acquiring new customers. Reducing churn from 5% to 3% increases LTV by 67% without spending a single additional marketing dollar. The three levers are: increase revenue per customer (upsells, cross-sells, price increases), improve retention (reduce churn), and expand gross margin (lower COGS).

LTV:CAC: The Golden Ratio

A 3:1 LTV:CAC ratio is the benchmark for a healthy, scalable business. Below 1:1 means every customer loses money. Between 1:1 and 3:1, the business works but is fragile. Above 5:1 may indicate you are under-investing in growth and leaving market share on the table.