Worked example
A $65 order, four times per year for three years at 40% gross margin gives $312 gross-profit LTV.
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Marketing & growth
Customer Lifetime Value Calculator
Estimate revenue and gross-profit lifetime value for an average customer.
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Adjust the example to calculate using your own figures. Results update instantly.
Your results
Calculated locally- Lifetime revenue
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- Lifetime gross profit
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Important assumptions
Excludes acquisition cost, future discounting, changing retention and fixed operating costs.
How to use your results
Using gross margin makes this more meaningful than revenue-only lifetime value. It treats all customers as one representative average.
Start with the example values, then replace them with amounts for the same transaction or time period. Double-check rates and units. The results are estimates intended to help you explore possible outcomes, not financial or tax advice.
Revenue LTV versus gross-profit LTV
Revenue received from a customer is not all available to pay for marketing. Applying gross margin offers an estimate of the profit contribution remaining after direct costs, making comparisons with acquisition costs more meaningful.
Average customer assumptions
A single lifetime value can hide differences between loyal repeat buyers and one-time purchasers. Segmenting by customer cohorts or product category is often more useful than relying on one company-wide average.
Should LTV be compared directly with ad spending?
Be careful. This simplified LTV excludes overhead and timing, while our CAC metric can exclude sales team and marketing technology costs. Compare consistent measures.
How to calculate customer lifetime value
Gross-profit LTV = order value × annual orders × years × gross margin
Using gross margin makes this more meaningful than revenue-only lifetime value. It treats all customers as one representative average.