LTV Calculator
Calculate your Customer Lifetime Value and optimize your acquisition strategy!
New to LTV? Check the FAQ below
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Customer Lifetime Value
$580
Total revenue per customer
How We Calculate Your LTV
Here's how we calculate your Customer Lifetime Value:
Monthly Price
Subscription price
Lifespan
Based on 5% churn
LTV
Lifetime Value
Total Revenue!
Tips & Insights
- 🚀 Excellent ROI (4.8x)! Your customer economics are strong. Prime territory for aggressive scaling.
- ✅ Good payback period! You're recovering acquisition costs quickly, which is great for cash flow.
Frequently Asked Questions
What is Customer Lifetime Value (LTV)?
Customer Lifetime Value (LTV) is the total revenue you expect from a single customer over their entire relationship with your business. For e-commerce, it's calculated as: Average Order Value × Purchase Frequency × Customer Lifespan. For subscriptions, it's: Monthly Price × Subscription Length (based on churn rate).
What's a good LTV?
A good LTV depends on your industry, but generally you want your LTV to be at least 3x your Customer Acquisition Cost (CAC). For SaaS businesses, LTV of $500-$5000+ is common. For e-commerce, $100-$500+ is typical. The key is that your LTV should comfortably exceed your acquisition costs.
How do I increase my LTV?
There are three main ways: 1) Increase Average Order Value through upsells, bundles, or premium tiers. 2) Increase Purchase Frequency with email marketing, loyalty programs, or subscriptions. 3) Reduce Churn through better onboarding, customer success, and product improvements. Check out our Ads Profit Calculator to optimize your acquisition strategy.
What is Payback Period and why does it matter?
Payback Period is how long it takes to recover your customer acquisition cost through profit. It matters because it affects your cash flow - a shorter payback period (under 12 months) means you can reinvest in growth faster. SaaS companies typically aim for 5-7 months.
What's the difference between LTV and ROI?
LTV measures the total revenue from a customer over their lifetime. ROI measures how much profit you make for every dollar spent acquiring that customer. For example: if LTV is $600 and CAC is $100, your ROI is 5x (you make $500 profit on a $100 investment). Both are important for understanding your business health.
How is churn rate related to LTV?
Churn rate directly impacts your subscription length, which determines LTV. For example, 5% monthly churn means customers stay ~20 months on average. Lower churn = longer customer lifespan = higher LTV. Reducing churn by just 1-2% can significantly increase your LTV and profitability.
When should I track LTV?
You should track LTV if you're running paid advertising, planning to scale, or have repeat customers. It's essential for making smart acquisition decisions - knowing your LTV helps you determine how much you can afford to spend acquiring each customer. Pair it with our ROAS Calculator to optimize your ad campaigns.