What This Calculator Estimates
This calculator estimates how much revenue an average customer generates over their entire relationship with your business, based on average purchase value, purchase frequency, and customer lifespan.
Formula / Method Used
Customer Lifetime Value = Average Purchase Value × Purchases Per Year × Customer Lifespan (Years).
Worked Example
A customer who spends $75 per purchase, buys 4 times a year, and stays a customer for 3 years has an estimated lifetime value of $900.
How to Interpret the Result
Compare this figure against your customer acquisition cost — if CLV is well above acquisition cost, your marketing spend is likely sustainable. A low CLV relative to acquisition cost signals a retention or pricing problem.
Common Mistakes
- Using total revenue instead of average per-customer figures.
- Ignoring that lifespan estimates are rough, especially for new businesses.
- Forgetting to factor in profit margin when comparing CLV to costs (see the margin-adjusted version).
- Treating CLV as fixed rather than something marketing and retention efforts can improve.
Related Calculators
Customer LTV (Margin-Adjusted) · Break-Even Sales · Profit Margin
Frequently Asked Questions
What does this customer lifetime value calculator estimate?
It estimates how much revenue an average customer generates over their entire relationship with your business.
How is CLV different from average order value?
Average order value looks at a single purchase, while CLV projects total revenue across every purchase a customer makes over their lifespan with you.
Why does customer lifespan matter?
Longer customer relationships compound revenue, so small improvements in retention can significantly increase CLV.
Does this account for profit margin?
No, this is a revenue-based CLV. For a profit-based version, see the Customer LTV calculator which factors in margin.
How can I use this number?
Compare CLV against customer acquisition cost to judge whether your marketing spend is sustainable.
Last updated: July 2026