Customer Lifetime Value Calculator

Estimate how much gross profit one typical customer generates from your own order value, repeat rate, gross margin, and customer lifespan assumptions. Add CAC only if you want the same model to show LTV:CAC, payback months, and orders needed to recover acquisition cost.

Examples

Repeat-purchase ecommerce

A $65 order, 0.6 orders per month, 58% gross margin, 18-month lifespan, and $40 CAC produces about $407.16 in lifetime gross profit and roughly 1.8-month payback.

Average order value: $65
Average orders per customer per month: 0.6 /mo
Gross margin percent: 58 %
Average customer lifespan: 18 mo
Customer acquisition cost (optional): $40

Lifetime gross profit / CLV

$407.16

Monthly revenue per customer

$39.00

Monthly gross profit per customer

$22.62

Lifetime orders

10.8 orders

Lifetime revenue

$702.00

LTV:CAC ratio

10.18 :1

Modeled orders to recover CAC

1.06 orders

Estimated CAC payback period

1.8 months

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How It Works

Formula

m = \dfrac{GM\%}{100}

R_m = AOV \times f_m

GP_m = R_m \times m

O_L = f_m \times L_m

R_L = R_m \times L_m

CLV = R_L \times m

LTV:CAC = \dfrac{CLV}{CAC}

O_{CAC} = \dfrac{CAC}{AOV \times m}

T_{CAC} = \dfrac{CAC}{GP_m}

Variables, symbols and units

$AOV$: Average order value(currency/order)
$f_m$: Average orders per customer per month(orders/month)
$GM\%$: Gross margin percent entered by the user(percent)
$m$: Gross margin converted to a decimal share(decimal share)
$L_m$: Average customer lifespan in months(months)
$R_m$: Monthly revenue generated by one customer(currency/month)
$GP_m$: Monthly gross profit generated by one customer(currency/month)
$O_L$: Total modeled orders across the customer lifespan(orders)
$R_L$: Total modeled revenue across the customer lifespan(currency)
$CLV$: Lifetime gross profit / customer lifetime value(currency)
$CAC$: Customer acquisition cost used for CAC comparisons(currency)

Calculation method explained

The page first turns one customer into monthly economics: average order value times monthly order frequency gives monthly revenue, and monthly revenue times gross margin gives monthly gross profit. It then scales those same monthly assumptions across the average customer lifespan to show lifetime orders, lifetime revenue, and lifetime gross profit / CLV. If you add CAC, the same ledger extends into LTV:CAC, orders needed to recover CAC, and CAC payback months. The math is planning math based on your own averages, not a retention forecast or channel verdict.

References and source material

Examples

Repeat-purchase ecommerce$65 · 0.6 /mo → $407.16

A $65 order, 0.6 orders per month, 58% gross margin, 18-month lifespan, and $40 CAC produces about $407.16 in lifetime gross profit and roughly 1.8-month payback.

Average order value: $65
Average orders per customer per month: 0.6 /mo
Gross margin percent: 58 %
Average customer lifespan: 18 mo
Customer acquisition cost (optional): $40

Lifetime gross profit / CLV: $407.16

Subscription offer without CAC$32 · 1 /mo → $201.60

If the team only wants to value the customer relationship first, a $32 monthly charge, 45% gross margin, and 14-month lifespan gives $201.60 in lifetime gross profit without forcing acquisition assumptions.

Average order value: $32
Average orders per customer per month: 1 /mo
Gross margin percent: 45 %
Average customer lifespan: 14 mo

Lifetime gross profit / CLV: $201.60

Repeat service business$120 · 0.25 /mo → $504.00

A $120 service visit, 0.25 visits per month, 70% gross margin, 24-month lifespan, and $90 CAC yields about $504 in lifetime gross profit with payback in about 4.3 months.

Average order value: $120
Average orders per customer per month: 0.25 /mo
Gross margin percent: 70 %
Average customer lifespan: 24 mo
Customer acquisition cost (optional): $90

Lifetime gross profit / CLV: $504.00

Frequently Asked Questions

What does this calculator count as customer lifetime value?

Here CLV means lifetime gross profit from one typical customer under the assumptions you enter. It starts with average order value and order frequency, then applies gross margin and lifespan. It does not claim to be net profit, cash flow, or a booked accounting result.

Why can CAC payback be blank even when CLV is shown?

CLV can still be zero or positive while monthly gross profit is zero under your model. If gross margin is 0%, or monthly purchase frequency is 0, the page can still show the lifetime math you entered but it cannot divide CAC by monthly gross profit to produce an honest payback month figure.

How are the CAC recovery outputs estimated?

They reuse the same averages already in the CLV ledger. Modeled orders to recover CAC divides CAC by gross profit per order, while estimated CAC payback divides CAC by monthly gross profit. Both outputs assume those averages stay steady long enough to recover acquisition cost.

What is intentionally outside the model?

This is a narrow planning model for one typical customer. It does not include cohort retention curves, discounting, taxes, financing costs, benchmark databases, or built-in judgments about what a “good” ratio should be. It is not a forecast engine and it is not accounting advice.

Customer Lifetime Value Calculator

Repeat-purchase ecommerce

How It Works

Examples

Frequently Asked Questions

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