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Customer Lifetime Value
CLTV Calculator
What is Customer Lifetime Value (CLTV) and why does it matter? Customer Lifetime Value is the total net revenue — or profit — that a business can expect to earn from a single customer over the entire duration of their relationship. It is one of the most strategically important metrics in any customer-facing business because it reframes how you think about customers: not as individual transactions, but as long-term assets. A business that knows its CLTV can answer questions like: How much can I afford to spend acquiring a new customer? Which customer segments are most valuable? Is our pricing and retention strategy working? CLTV is closely paired with Customer Acquisition Cost (CAC) — the cost to win a new customer. The ratio of CLTV to CAC is a widely used health metric: a ratio below 1 means you are losing money on every customer; a ratio of 3:1 or above is generally considered healthy for sustainable growth. This calculator supports two modes — a subscription / SaaS model for recurring revenue businesses, and a transactional model for businesses where customers make repeat but irregular purchases.
Step 1 — Revenue per customer
Tell us how much a typical customer pays each month. You can enter the figure directly, or let the calculator derive it from your total monthly revenue and customer count.
The average monthly subscription fee paid by a single customer. If you have multiple pricing tiers, use a weighted average across your current customer mix.
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Or calculate from totals:
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Step 2 — Gross margin
The percentage of revenue you keep after direct costs (hosting, support, infrastructure, cost of goods sold). If your cost to serve each customer is minimal, this will be high. A SaaS business might be 70–85%; a product business could be 40–60%. Leave at 100% if you want to calculate gross CLTV without adjusting for margin.
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Step 3 — Churn rate
The percentage of your customers who cancel or stop subscribing each month. For example, if 5 out of every 100 customers leave per month, your monthly churn rate is 5%. Lower is better — even a small reduction in churn can dramatically increase CLTV. A healthy SaaS business typically aims for 2% monthly churn or below.
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The average customer lifespan is calculated as 1 ÷ monthly churn rate. A 3% monthly churn means the average customer stays for about 33 months (~2.8 years).
Step 4 — Account expansion (optional)
The average additional monthly revenue per customer from upsells, add-ons, or seat expansions — above and beyond the base subscription. Leave at 0 if you do not have an expansion motion or do not wish to include it.
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Step 5 — Customer acquisition cost (optional)
The total marketing and sales cost divided by the number of new customers acquired in a period. Include advertising spend, sales team time, onboarding costs, and any other cost directly attributable to winning a new customer. Entering this unlocks the LTV:CAC ratio — the most important efficiency metric in growth businesses.
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A LTV:CAC ratio of 3:1 is the widely cited benchmark for a healthy, scalable business. Below 1:1 means you are losing money on every customer. Above 5:1 may suggest you are under-investing in growth.
Customer Lifetime Value (CLTV)
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Customer cohort value over time
Cumulative CLTV over customer lifetime