Free online calculator
Customer Lifetime Value Calculator
Estimate gross-margin-based customer lifetime value using average order value, purchase frequency, gross margin and expected lifespan..
Formula: CLV = average order value × annual purchase frequency × gross margin rate × customer lifespan
How to use the Customer Lifetime Value Calculator
Estimate gross-margin-based customer lifetime value using average order value, purchase frequency, gross margin and expected lifespan.
Formula
CLV = AOV × purchases per period × (gross margin / 100) × lifespan in matching periods.
Worked example
$50 AOV × 4 purchases/year × 40% margin × 3 years gives $240 lifetime gross contribution.
Interpretation and limitations
Frequency and lifespan must use compatible periods. This simple model does not discount future cash flows and does not subtract acquisition costs or all customer-support costs.
Customer Lifetime Value questions
Is the result revenue-based lifetime value?
No. It multiplies by gross margin, so it estimates lifetime gross contribution rather than total customer revenue.
Can I compare this directly with CAC?
Yes as a simplified unit-economics comparison, provided the same customer segment and compatible cost definitions are used. It is not a complete cash-flow forecast.
Continue your calculation
For the next step, use the LTV to CAC Ratio Calculator or the Customer Acquisition Cost Calculator. Review each tool’s input definitions before carrying a result into another calculation.
Frequently asked questions
Is this calculator free?
Yes. It runs in your browser and does not require an account.
How should I use the result?
Use the result as a planning estimate and verify business-critical decisions against your source records.