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Customer Lifetime Value Calculator

Calculate CLV, CLV:CAC ratio, and acquisition payback from purchase patterns.

Your numbers

Start from an example

$
/yr

12 for a monthly subscription, 52 for weekly; 0.5 means once every two years.

Customer lifespan
$
Gross margin

Result

Customer LTV
$360
Status: in range.CLV:CAC
3.6:1
Status: in range.CAC payback
10 mo
Annual value
$200
Monthly value
$16.67

CLV to net payback

Revenue CLV gets trimmed by gross margin, then CAC shows what remains after acquisition.

Revenue CLV
$600
Net after CAC: 600
Margin effect
-$240
Net after CAC: 360
CAC
-$100
Net after CAC: 260

General business information, not legal, tax or financial advice. The result comes only from your inputs and the published method. How we check our numbers.

What does the Customer Lifetime Value Calculator calculate, and which formula does it use?

The Customer Lifetime Value Calculator computes CLV as average purchase value × purchase frequency per year × customer lifespan in years. It then applies your gross-margin percentage for a margin-adjusted CLV, divides that by acquisition cost for an LTV:CAC ratio, and estimates payback months as CAC divided by monthly margin-adjusted value.

Last updated .

How to use it

  1. Enter average purchase value, purchase frequency per year, customer lifespan in years, acquisition cost, and gross margin. Use cohort averages rather than your best customers so the result reflects the typical customer you are paying to acquire.
  2. Read revenue CLV, annual value, monthly value, margin-adjusted CLV, CLV:CAC ratio, and CAC payback months. David Skok's SaaS Metrics 2.0 guidelines are a CLV:CAC ratio above 3:1 and acquisition cost recovered within 12 months.
  3. Base decisions on margin-adjusted CLV, not revenue CLV. If gross margin is only 40-50%, the profit value of a customer can be dramatically lower than the revenue number suggests, which changes how much CAC you can safely tolerate.
  4. Use the result to set CAC limits, segment high-value customers, and justify retention work. Increasing purchase frequency from 3 to 4 times per year raises CLV by a third, and lifespan from 2 to 3 years by half; either can be cheaper than buying the same value through more top-of-funnel traffic.
  5. Re-run monthly or by cohort whenever pricing, repeat rate, margin, or CAC shifts. Track margin-adjusted CLV and payback by channel because blended averages can hide an unprofitable acquisition source.

Questions people usually ask

What is Customer Lifetime Value (CLV)?

CLV is the total revenue a business can expect from a single customer over their entire relationship. It's calculated as average purchase value × purchase frequency × customer lifespan.

What is a good CLV:CAC ratio?

David Skok's guideline for SaaS is above 3:1, so a customer returns more than three times what it cost to acquire; the best SaaS businesses reach 7:1 or 8:1. Below 1:1 you lose money on every customer you acquire.

Why use margin-adjusted CLV instead of revenue CLV?

Revenue CLV overstates value because it ignores cost of goods sold. Margin-adjusted CLV reflects actual profit and gives a more accurate picture of what each customer is truly worth.

Is this tool free and private to use?

Yes. AI Biz Hub tools are free, no-signup browser tools. Inputs stay in your browser unless you choose to share a URL.

The same numbers as a table

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Use it from code

The same calculation as a JavaScript module you can import. It runs where you import it, with no request, key or rate limit.

import { compute } from "https://aibizhub.io/engines/customer-lifetime-value-calculator.js";

Input and output contract, TypeScript types and the guide for agents.