Customer Lifetime Value Calculator
Enter average monthly revenue per customer, gross margin, and monthly churn to estimate lifetime value and how long a customer stays.
The ceiling on what you can spend to grow
Lifetime value is the single number that tells you how much a customer is really worth — and therefore how much you can afford to spend winning one. Enter the average monthly revenue a customer brings, your gross margin, and your monthly churn rate, and this calculator estimates the gross profit you'll earn over their entire relationship with you, plus how many months that relationship typically lasts.
Pair it with your customer acquisition cost. A widely used rule of thumb is that LTV should be at least three times CAC, so the calculator also shows the maximum you'd want to pay per customer at that ratio. If your acquisition cost creeps above that line, either retention has to improve or acquisition has to get cheaper.
How it's calculated
Lifespan (months) = 1 ÷ (monthly churn ÷ 100). LTV = monthly revenue × (gross margin ÷ 100) × lifespan. Max CAC = LTV ÷ 3. Everything updates instantly in your browser.
Frequently Asked Questions
What is customer lifetime value (LTV)?
LTV is the total gross profit you expect from an average customer over the whole time they stay with you. It tells you how much you can afford to spend acquiring one.
How is LTV calculated here?
LTV = average monthly revenue × gross margin × average customer lifespan in months. The lifespan is derived from your monthly churn rate (1 ÷ churn).
Why include gross margin?
Revenue is not profit. Multiplying by gross margin gives the value you actually keep after the cost of serving the customer, which is the number that should guide acquisition spend.
What is a healthy LTV to CAC ratio?
A common benchmark is an LTV at least 3× your customer acquisition cost (CAC). Below that, acquisition is often too expensive to sustain.
Retention, pricing, and growth strategy for service businesses and SaaS.