Customer lifetime value calculator
Customer lifetime value from revenue per customer, gross margin and monthly churn.
In your currency.
%
%
Customer lifetime value
980
revenue × margin ÷ churn
Expected customer lifetime
25 months
1 ÷ monthly churn
How it works
CLV = average revenue per customer per month × gross margin ÷ monthly churn rate. 1 ÷ monthly churn is the expected lifetime in months when churn stays constant: 5% churn means 20 months.
Using gross margin rather than revenue gives the value you keep, which is what you compare with the cost of acquiring a customer.
Questions
What is a good CLV to CAC ratio?
A ratio of 3 to 1 is a common rule of thumb. It only means something if CLV uses gross margin and CAC includes all acquisition costs.
Read next
- What is lifetime value?Lifetime value: an estimate of the total margin a business earns from a customer over their whole relationship. With the formula and a worked example.
- Customer lifetime value, explainedCustomer lifetime value explained: the formula, why to use gross margin, how churn sets it, how it relates to acquisition cost, and the mistakes to avoid.
- Churn rate calculatorFree churn rate calculator: enter customers at the start of a period and customers lost to get your churn rate, with the formula and a yearly view.
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