Customer lifetime value calculator

How it works

CLV = average order value × purchases per year × years retained

This is the revenue form, which is what the inputs describe and what most CLV tools return. It is also the optimistic one: it counts turnover, not what you keep. Enter your gross margin and the second figure shows the margin-based CLV, which is the number to compare against acquisition cost. A three-to-one ratio of margin CLV to acquisition cost is the usual rule of thumb; below one-to-one you are buying customers at a loss.

This tool runs entirely in your browser. Nothing you type is sent to a server, stored or logged.

Frequently asked questions

Revenue CLV or margin CLV?

Margin, whenever you are comparing against acquisition cost. Revenue CLV counts money that goes straight back out as cost of goods, and using it to justify ad spend is how businesses grow into a loss.

How do I estimate years retained?

One divided by your annual churn rate is the standard approximation: 20% churn implies about five years. Use the churn calculator on this site to get the input.

Should I discount future value?

For long-lived relationships, yes — money five years out is worth less. This calculator does not, so treat long horizons as an upper bound.

Does it handle subscriptions?

Yes. Use the subscription amount as average order value and the number of billing periods in a year as frequency.