LTV, or customer lifetime value, is the total value a customer generates over the whole relationship. It is estimated from average order value, purchase frequency, customer lifespan, and gross margin.

How do you calculate LTV?

LTV = average order value × purchases per month × customer lifespan in months × gross margin. A customer spending $45 per order, 1.5 times a month, for 12 months at 60% margin is worth $486.

What is a good LTV:CAC ratio?

A ratio of 3:1 or higher is the common benchmark. Below 1:1 acquisition loses money, while a very high ratio can mean the business is underinvesting in growth.

How do I calculate my current LTV?

Enter your average order value, purchases per month, and customer lifespan into the calculator. Add gross margin to get a margin-adjusted value, and add CAC to see the LTV:CAC ratio. Results update as you type — there is no submit button.

Why include gross margin in the LTV calculation?

Margin turns a revenue estimate into a value estimate. Without it, LTV overstates what a customer is actually worth, and comparing revenue-based LTV against CAC makes unprofitable acquisition look healthy.

Is the LTV calculator free?

Yes. The calculator is free, runs in the browser, and does not require signup. It is designed for quick checks — deeper cohort and payback analysis still needs your own revenue data.

Can we scale on an LTV number alone?

Check how quickly the value actually arrives first: a strong 24-month LTV does not help a business that has to fund acquisition this quarter.

LTV Calculator: Calculate Customer Lifetime Value

Use the free LTV calculator to estimate how much a customer is worth over the whole relationship — no signup, and results update as you type. LTV sets the ceiling for acquisition cost, so the estimate should reflect margin and retention before it changes bids or budgets.

Free, no sign-upFormula and exampleSets allowable CPA

Use Calculator View Predictive LTV

Enter Your Numbers

Average Order ValueRevenue per purchase, $

Purchases per MonthAverage per customer

Customer LifespanMonths as a customer

Gross MarginOptional, % of revenue

Customer Acquisition CostOptional, $ — unlocks the LTV:CAC ratio

LTV Formula

LTV = Order Value × Purchases / Month × Lifespan × Margin

Customer Lifetime Value (LTV) estimates how much a customer is worth over the whole relationship, not just the first purchase. Adding gross margin turns the revenue estimate into a value estimate you can compare directly against acquisition cost.

Example: A customer who spends $45 per order, buys 1.5 times a month, stays for 12 months at a 60% margin is worth $486 (45 × 1.5 × 12 × 0.6). With a $30 CAC, the LTV:CAC ratio is 16:1.