Marketing
Customer Lifetime Value Calculator
Estimate the revenue value of one customer using average order value, purchase frequency, and expected customer lifespan.
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Enter average order value, purchase frequency, and lifespan.
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CLV Formula
CLV = Average Order Value x Purchase Frequency x Customer Lifespan
This is a simple revenue-based CLV model that works well for quick planning and benchmarking.
What is customer lifetime value?
Customer lifetime value, often shortened to CLV or LTV, estimates how much revenue a typical customer brings in before they stop buying from you.
Teams use CLV to make smarter acquisition, retention, and pricing decisions. If you know what a customer is worth over time, you can set more rational CAC targets and invest more confidently in channels that create durable customers.
Frequently asked questions
What is customer lifetime value?
Customer lifetime value estimates the total revenue one customer generates across their entire relationship with your business, from first purchase to final one.
How do I calculate CLV?
A simple version is average order value multiplied by purchase frequency and customer lifespan. That gives a revenue-based estimate of customer value.
Why does CLV matter?
CLV helps you understand how much you can afford to spend to acquire customers and still stay profitable over time.
What is the difference between CLV and LTV?
CLV (customer lifetime value) and LTV (lifetime value) are used interchangeably in most marketing contexts. Both measure the expected total revenue or profit from a customer over the full duration of the relationship. Some teams use LTV to refer to a gross revenue figure and CLV for a profit-adjusted version.
How does CLV affect my CAC targets?
Your maximum sustainable CAC is determined by CLV and your target payback period. If a customer is worth $600 over their lifetime and you want to pay back acquisition cost within 12 months, you need to calibrate how much revenue is earned in year one to set your CAC ceiling.