Find out what a customer is really worth. Enter a few numbers to get customer lifetime value instantly — plus your LTV:CAC ratio against the 3:1 benchmark that decides if growth is sustainable.
A 3:1 LTV:CAC ratio is the healthy benchmark; 4:1+ is elite. Below 2:1 is usually unsustainable — and above 5:1 can mean you’re underinvesting in growth.
Get a plan to grow LTVFormulaLTV = Average Order Value × Purchases Per Year × Customer Lifespan (years)
Customer lifetime value (LTV or CLV) is the total revenue a customer generates over their entire relationship with your business. A simple formula is average order value × purchases per year × customer lifespan. Compared to acquisition cost, a 3:1 LTV:CAC ratio is the widely used benchmark for sustainable growth.
LTV means the most next to what a customer costs to acquire. Here’s the benchmark the data supports.
is the most common LTV:CAC benchmark — $3 of lifetime value per $1 of acquisition cost
can actually mean you’re underinvesting in growth and leaving demand on the table
See your ratio above, then book a call — we’ll show you how to lift LTV and bring acquisition cost down at the same time.
Divide total revenue by number of orders over a period to get what a customer spends per purchase.
Work out how many times a customer buys per year and how many years they typically stay with you.
Multiply the three together for LTV. Divide LTV by your customer acquisition cost for the LTV:CAC ratio that tells you if growth is sustainable.
If you know a customer is worth $3,000 over their lifetime, spending $800 to acquire one isn’t a cost — it’s a 3.75:1 return. LTV is the number that tells you how aggressively you can afford to grow. Businesses that don’t know their LTV underspend out of fear and lose to competitors who do. Raise LTV through retention and repeat purchases, and every acquisition channel becomes more profitable overnight.
Customer lifetime value (LTV or CLV) is the total revenue a single customer generates across their entire relationship with your business. A simple way to calculate it is average order value × purchases per year × customer lifespan in years. It tells you what a customer is truly worth — and therefore how much you can afford to spend to acquire one.
A common LTV formula is average order value × purchase frequency per year × customer lifespan in years. For example, a $500 average order, 2 purchases a year, over 3 years, equals a $3,000 LTV. Use the calculator above to run your own numbers and instantly see your LTV:CAC ratio.
A 3:1 LTV:CAC ratio is the widely used benchmark for sustainable growth — $3 of lifetime value for every $1 spent to acquire a customer. A 4:1 ratio or higher is considered elite. Below 2:1 is generally unsustainable, and above 5:1 can signal you’re underinvesting in growth.
LTV tells you how much you can profitably spend to acquire a customer, which sets your entire marketing budget. Businesses that know their LTV can outbid competitors for the same customers and still profit. It also focuses attention on retention and repeat purchases — usually the cheapest, fastest way to grow revenue.
Yes. This customer lifetime value calculator is completely free, needs no signup, and runs entirely in your browser — nothing is stored or sent anywhere. Enter your average order value, purchase frequency, lifespan, and CAC to get your LTV and LTV:CAC ratio instantly.
Tell us about your business. We’ll map the highest-leverage moves to lift lifetime value and bring your cost per customer down.
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