Customer Lifetime Value (CLV) Calculator
Calculate the total value a customer brings to your business over their entire relationship.
Use CLV to determine how much you can spend on customer acquisition.
Customer Lifetime Value
Customer Lifetime Value Formula
CLV = (Average Purchase Value × Purchase Frequency × Gross Margin) ÷ Churn Rate
Where:
- Average Purchase Value = total revenue ÷ number of purchases
- Purchase Frequency = purchases per customer per year
- Gross Margin = (revenue − COGS) ÷ revenue
- Churn Rate = % of customers lost per year
Healthy CLV:CAC ratio:
- 3:1 or higher is considered healthy (you earn 3× what you spend to acquire a customer)
- Below 1:1 = losing money on every customer
Example: $100 AOV × 4×/year × 60% margin ÷ 20% churn = $1,200 CLV