Calculate customer lifetime value LTV for your business. See how LTV compares to acquisition cost. Free LTV calculator. No signup.
Customer Lifetime Value (LTV) is the single most important metric for sustainable business growth — it tells you the maximum you can spend to acquire a customer and still be profitable. Most businesses guess at this number. Our calculator computes your exact LTV from average purchase value, purchase frequency, and customer lifespan so you can set marketing budgets with confidence.
LTV formula: Average purchase value × Purchase frequency per year × Customer lifespan in years = LTV. Example for subscription business: $50/month × 12 months × 3 years = $1,800 LTV. Example for e-commerce: $75 average order × 4 orders per year × 2 years average retention = $600 LTV. Gross margin LTV: multiply by gross margin for true profit per customer.
LTV:CAC ratio benchmarks: Under 1:1 — business is unsustainable, losing money on every customer. 1:1 to 2:1 — marginal, recovering acquisition cost but no profit. 3:1 — healthy business (standard target). 4:1 or higher — excellent unit economics, under-investing in growth. Payback period: how many months until customer generates enough profit to cover acquisition cost — target under 12 months.
Good LTV is relative to your customer acquisition cost. The ratio matters more than the absolute number. LTV 3x your CAC is healthy. A business with $30 LTV and $10 CAC is healthier than one with $1,000 LTV and $600 CAC. By industry typical LTV ranges: SaaS $1,000-$10,000+, E-commerce $100-$500, Subscription boxes $200-$500, Financial services $1,500-$5,000.
Most effective LTV improvement strategies: Reduce churn — even 1% monthly churn reduction increases LTV significantly through compounding retention. Upsell and cross-sell — increase average order value. Loyalty programs — increase purchase frequency. Improve product or service to increase retention. Offer annual prepay discount — increases upfront payment and reduces early cancellation. Exceptional customer service reduces churn more than any other single factor.
Subscription LTV: monthly revenue divided by monthly churn rate = average customer lifespan in months × monthly revenue. Example: $100/month, 5% monthly churn = 20 months average lifespan × $100 = $2,000 LTV. One-time purchase LTV: requires tracking repeat purchase rates over time — harder to calculate without historical data. Use cohort analysis: how much did customers acquired in month 1 spend in months 1-12, 13-24, etc.
Yes — every FreeFixo tool, including the Customer Lifetime Value Calculator — Know What Each Customer is Worth, is 100% free with no paywall, no premium tier, and no usage limits. You do not need to create an account, enter a credit card, or share an email.
The Customer Lifetime Value Calculator — Know What Each Customer is Worth uses the same formulas, rates, and reference data that financial planners, professionals, and government sources publish. Results are estimates intended for planning and education — for situations involving large sums or legal consequences, confirm with a qualified professional before acting.
No signup is ever required. The Customer Lifetime Value Calculator — Know What Each Customer is Worth runs entirely in your browser — your inputs are never sent to a server, and we do not store, track, or share your data. Open it, get your answer, close the tab.