Free tool, no account needed
LTV calculator: what one customer is worth to you, from the first sale to the last
Put in what a customer spends, how often they buy and how long they stay. You get their lifetime value, with the formula and your numbers in it.
Three numbers, then the sum
There are no averages built in. Start with last year's customers.
- 01Put in what a customer spends on an average sale, and how many times a year they buy.
- 02Put in how many years a customer keeps buying, or the share of customers you lose each year.
- 03Add your gross margin and what it costs to win a customer, if you know them, to see profit and payback.
How the sum works
The formula sits under the result, filled in with your numbers.
Lifetime value = average sale x purchases a year x years they stay. S$120 x 6 x 3 is S$2,160.
If you know the share you lose each year instead, years they stay = 1 divided by that share. Lose 25% a year and a customer stays 4 years on average.
Lifetime profit = lifetime value x gross margin. S$2,160 at a 40% margin is S$864.
LTV to CAC = lifetime profit divided by what it costs to win one customer. S$864 against S$200 is 4.3 to 1.
Getting the inputs right
Four places a lifetime value goes wrong, so check them before you plan with it.
Take the people who bought at least once last year, and leave out the ones who only asked.
Use a year you know. A tuition centre's purchases a year is its terms; a clinic's is visits.
Be honest about how long they stay. If you've only traded two years, you don't know about year five yet.
Put every cost of winning a customer into CAC: ads, the hours you spend on enquiries, and any referral fee.
When to work it out
Run it when you're about to spend money to bring customers in.
- 01Before you raise your ad budget
- 02When you set a referral fee
- 03Before a discount for first-time customers
- 04When you choose which customers to call first
Know what each customer has paid
Palby CRM, which we make, keeps what each customer has paid on their record, so you can check your sum later.
- Add an Amount paid field, and the pipeline totals what came in by month, quarter or year
- Several deals per customer, each with its own products and close date
- Birthdays and customers who haven't been in touch for 30 days, as ready-made views
- Export everything to CSV when you want to do the sum yourself
Questions
It's what a customer spends with you over the whole time they buy from you. You work it out from what they spend on an average sale, how often they buy and how long they stay.
Multiply the average sale by the purchases a year, then by the years a customer stays. For profit rather than revenue, multiply that by your gross margin. The calculator shows each step with your numbers.
None. LTV and CLV are two names for customer lifetime value. Some people use LTV for revenue and CLV for profit, so say which one you mean.
There's no single right number, because it depends on your margin and how fast you need the money back. Compare your own ratio over time, worked out the same way each time.
Use the share of customers who don't come back each year instead. If 1 in 4 stop buying each year, a customer stays about 4 years.
It's how many months of a new customer's profit it takes to cover what you spent to win them. A shorter payback means you get your money back sooner.
No. Every number on it is one you type.
Yes, the tool is free. There's no account, and the Copy link button saves your numbers in the link.
Know what your customers are worth
Bring your numbers to a 30-minute walkthrough and see each customer's payments on their record.
30 minutes. You choose the day and the time.