Customer Lifetime Value Calculator
Enter your average purchase value, how often a customer purchases per year, and their average relationship length to calculate customer lifetime value (CLV) — a core metric for evaluating marketing spend and customer relationships.
How the Customer Lifetime Value formula works
A standard simplified CLV formula:
CLV = Average purchase value × Purchase frequency (per year) × Customer lifespan (years)
Subtracting customer acquisition cost (CAC) from this gives net CLV — a common way to evaluate whether acquisition spending is worthwhile.
Step-by-step calculation
- Multiply average purchase value by how many times a customer purchases per year to get annual customer value.
- Multiply annual customer value by the average number of years a customer stays to get total lifetime value.
- Optionally subtract customer acquisition cost to see net value per customer.
Worked example
An average purchase of $60, made 4 times a year, over an average 3-year customer relationship: CLV = 60 × 4 × 3 = $720. If acquiring that customer cost $150, net CLV = $720 − $150 = $570.
Frequently asked questions
Why does CLV matter for marketing decisions?
Knowing CLV tells you how much you can reasonably spend to acquire a customer while still being profitable — a $50 acquisition cost is a bargain against a $720 CLV but a loss against a $30 CLV.
Is this a precise prediction of future value?
No — this is a simplified average-based model. More sophisticated CLV models account for changing purchase behavior, retention curves, and discounting future cash flows to present value, but this version is a useful quick estimate.