About this Customer Lifetime Value
If you know how much a customer is worth over years (CLV), you know how much you can afford to spend to get them (CAC). Increasing retention or order value boosts CLV significantly.
Who this calculator is for
- Subscription, ecommerce, and retention teams measuring customer value over time.
- Founders deciding how much acquisition spend a business model can support.
- Operators comparing the revenue impact of retention, pricing, and repeat purchase improvements.
When to use it
- Estimate revenue-based customer value before setting CAC targets.
- Model how changes in order value, order frequency, or retention shift overall customer economics.
- Benchmark whether your current acquisition strategy fits the value of a retained customer.
How to use this calculator
- Enter Average Order Value.
- Enter Purchase Frequency (orders per year).
- Enter Customer Lifespan (years).
Key assumptions
- This is a simple revenue-based CLV model, not a predictive or margin-adjusted one.
- Average order value, purchase frequency, and lifespan are assumed to stay stable over the modeled period.
- Inputs should be positive values drawn from the same customer segment or average cohort.
Accuracy and testing
Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.
How this calculator works
CLV = Avg Order Value * Purchase Frequency * Lifespan.
Inputs explained
Avg Order Value (AOV)
The average amount spent per transaction.
Purchase Frequency
How many times a customer buys from you per year.
Lifespan
How many years the customer stays active.
Understanding your results
The Lifetime Value is the ceiling for your acquisition costs. A high CLV allows for more aggressive marketing.
Example scenarios
Coffee Subscription
$20/mo ($240/yr). Stays 3 years. CLV = $720.
Car Dealership
$30,000 car. Buys every 5 years. Stays for 15 years (3 cars). CLV = $90,000.
Key Features
- Simple CLV Model
- Annual Value Display
- Revenue-Based
Tips & Best Practices
- It is cheaper to retain existing customers than to find new ones. Increasing lifespan boosts CLV directly.
- Upselling increases AOV, which also boosts CLV.
Glossary of Terms
- AOV
- Average Order Value.
- Churn
- The rate at which customers stop doing business with you. High churn kills CLV.