Customer Lifetime Value Calculator
Calculate Customer Lifetime Value (CLV / LTV) with the e-commerce model (average order value × purchases per year × lifespan) or the SaaS model (ARPU ÷ monthly churn), apply gross margin for net value, and compare against CAC for an LTV:CAC ratio and payback period.
Input
E-commerce = repeat purchases over years. SaaS = recurring revenue with monthly churn.
Average revenue per transaction (AOV) — total revenue ÷ number of orders.
How many times the average customer buys from you per year.
Average number of years a customer keeps buying before churning.
Optional. Profit % of each sale — multiplies CLV to give Net CLV. Leave blank for gross CLV.
Optional Customer Acquisition Cost. Add it for an LTV:CAC ratio and payback period.
Output
| Metric | Value |
|---|---|
| No data yet | |
Guides
Customer Lifetime Value (CLV, also called LTV) is the total profit a business can expect from a single customer over the whole of their relationship with you. This calculator works out CLV two ways — the classic e-commerce / retail model and the SaaS / subscription model — and, if you add your acquisition cost, tells you whether that value actually pays for the cost of winning the customer.
How to use it
- Pick your business model. E-commerce is for businesses where customers buy repeatedly over months or years (retail, hospitality, DTC). SaaS is for products with recurring revenue and a monthly churn rate.
- Fill in the fields for that model.
- E-commerce: average order value, purchases per year, and customer lifespan in years. Add an optional gross margin to convert revenue-based CLV into profit-based Net CLV.
- SaaS: ARPU (average revenue per user per month) and monthly churn rate. Add an optional gross margin; it defaults to 100% if left blank.
- Optionally enter your CAC (Customer Acquisition Cost). The tool then adds an LTV:CAC ratio, a plain-English verdict, and a payback period.
The results table updates as you type. Use the copy or download button to export it as CSV.
The formulas
E-commerce CLV = Average Order Value × Purchases per Year × Customer Lifespan. Multiplying by gross margin turns that revenue figure into Net CLV — the profit each customer generates.
SaaS LTV = ARPU ÷ Monthly Churn Rate, then multiplied by gross margin. The reciprocal of churn is the average customer lifespan in months (5% monthly churn means a customer sticks around 20 months on average).
LTV:CAC ratio divides lifetime value by acquisition cost. A ratio around 3:1 to 5:1 is the widely cited healthy range: below 1:1 you lose money on every customer, and much above 5:1 you may be under-investing in growth.
What is a good CLV?
There is no universal number — CLV only means something relative to your CAC. A CLV of $500 is excellent if CAC is $100 and unsustainable if CAC is $600. That is why the LTV:CAC ratio matters more than CLV alone.
Why does churn matter so much for SaaS?
Because LTV divides by churn, small churn changes swing the result hard. Cutting monthly churn from 5% to 4% raises average lifespan from 20 to 25 months and lifts LTV by 25%. Retention is usually the highest-leverage number in subscription economics.
Should I use gross or net CLV?
Compare against CAC using net (margin-adjusted) value whenever you can, since acquisition cost is paid out of profit, not revenue. Gross CLV is fine for a quick top-line sizing.
What counts as a good payback period?
For SaaS, recovering CAC within 12 months is healthy and 12–24 months is common. For e-commerce, recovering within the first year is strong.
Privacy
This calculator runs entirely in your browser. Your order values, revenue, churn, and cost figures are never uploaded, logged, or stored — the math happens locally on your device.
Use it from code
From 3 credits per callREST API
curl -X POST https://api.iotools.cloud/v1/tool/customer-lifetime-value-calculator \
-H "Authorization: Bearer YOUR_API_KEY" \
-H "Content-Type: application/json" \
-d '{
"model": "ecommerce",
"avgOrderValue": "75",
"purchaseFrequency": "4",
"customerLifespan": "3",
"grossMargin": "60",
"cac": "150"
}'Swap in your own key from your account. The tool's fields are the body — no wrapper.
Ask an AI agent
Use the IOTools `customer-lifetime-value-calculator` tool (Customer Lifetime Value Calculator) on this input:
YOUR_INPUT_HEREPaste this at any agent connected to the IOTools MCP server, then add your input.